Adjusting variable cost income to absorption net income The fixed overhead budgeted for Hamlet...

Adjusting variable cost income to absorption net income

 The fixed overhead budgeted for Hamlet Company at an expected capacity of 500,000 units is $1,500,000. Variable costing is used internally, and the net income is adjusted to an absorption costing net income at year-end. Data collected over the last three years show the following:

	First Year	Second Year	Third Year
Units produced	502,000	498,000	495,000
Units sold	496,000	503,000	495,000
Net income—(variable cost)	$500,000	$521,000	$497,000

Determine the adjustment each year to convert the variable costing income to absorption costing net income. Compute the absorption costing net income for each year.