jamesnaquan132
jamesnaquan132
17.12.2019 • 
Business

Ipek inc. is facing a problem with their 4th quarter absorption costing net operating income on december 25th. their net operating income target is $3,000,000 and the data so far is as follows : sales revenue : $25,000,000 ($500 per unit) variable cost of goods sold : $10,000,000 ($200 per unit) fixed overhead : $13,000,000 fixed selling and administrative expenses : $1,000,000 variable selling and administrative expenses : 4% commission on sales ipek has a policy of having zero inventories on hand at end of each quarter. no further sales are possible during the year and all of the units produced so far have been sold. the ceo is planning to produce items for inventory to meet the net operating income target.

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