Assuming the company sells its product at a price of $25 per unit, and incurred $10,000 in selling and administrative cost , $68,000 is the amount of net income under absorption costing. Hence the final answer is B. $68,000.
The net income for the company under absorption costing can be calculated using the following equation:
Net Income = (Sales Price x Quantity Sold) - (Variable Manufacturing Cost x Quantity Produced) - (Fixed Manufacturing Overhead Cost) - (Selling & Administrative Cost)
In this case, the equation is:
Net Income = (25 x 6,000) - (12 x 8,000) - (60,000) - (10,000)
Net Income = $68,000
Therefore, the net income under absorption costing is $68,000.
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