The gross profit of Hex Industries for May under absorption costing is $604,000.
Under absorption costing, the total or full costs of manufacturing or (variable and fixed) cost of goods sold are included when determining the gross profit.
Sales $ 990,000
Variable cost of goods sold 268,000
Fixed cost of goods sold 118,000
Total cost of goods sold = $386,000
Gross profit = $604,000 ($990,000 - $386,000)
Fixed selling and administrative costs 118,000
Variable selling and administrative costs 143,000
Total period costs = $261,000 ($118,000 + $143,000)
Net income = $343,000 ($604,000 - $261,000)
Thus, the gross profit of Hex Industries for May under the absorption costing method is $604,000.
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