Solution for QID #810: The following income statements are provided for Li Company& | StudyHelpMe

The following income statements are provided for Li Company’s last two years of operation:20122013 Number of units produced and sold4,100 3,700 Sales revenue$69,700 $62,900 Cost of goods sold55,300 49,960 Gross margin14,400 12,940 General, selling and administrative expenses12,620 11,740 Net income$1,780 $1,200 Assuming that cost behavior did not change over the two year period, what is the annual amount of the company’s fixed manufacturing overhead?Best answerrocky4ever answered this 2 hours laterReport abuse 6,294 answers Ac€?c 59% Best AnswerUsing High Low MethodVariable manufacturing Overhead cost per unit = (55300-49960)/(4100-3700)Variable manufacturing Overhead cost per unit = $ 13.35The annual amount of the company’s fixed manufacturing overhead = 55300-13.35*4100The annual amount of the company’s fixed manufacturing overhead = $ 565AnswerThe annual amount of the company’s fixed manufacturing overhead = $ 565I don’t understand how they came up with $565. Can you please break it down for me?Thank you.