Crystal, the owner of Crystal Clean, is planning for the nex…
Crystal, the owner of Crystal Clean, is planning for the next year. She uses the absorption method to determine the evaluation of employees and how much to increase their hourly wage. She has budgeted the following information: Variable operating expenses $3 per unit Fixed operating expenses $210,000 Variable manufacturing cost $10 per unit Fixed manufacturing cost $225,000 Units to be produced 25,000 units Unit selling price $32 per unit Following are actual amounts for the year: Beginning inventory (units) 0 Actual production (units) 23,500 Sales volume (units) 22,000 There were no price or efficiency variances for either year. Crystal writes off any fixed MOH volume variance directly to COGS. Calculate the operating income for year 1.