A business operated at 100% of capacity during its first month and incurred the following costs:Production costs (18,300 units): Direct materials$179,400 Direct labor228,200 Variable factory overhead254,800 Fixed factory overhead101,600$764,000Operating expenses: Variable operating expenses$134,000 Fixed operating expenses48,700182,700If 1,700 units remain unsold at the end of the month and sales total $1,070,000 for the month, what would be the amount of income from operations reported on the absorption costing income statement?a.$194,416b.$61,534c.$184,834d.$70,973

Solution- Calculation the amount of production cost for 16600 units (18300-1700 units) Production…

Answered: A business operated at 100% of capacity…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A business operated at 100% of capacity during its first month and incurred the following costs:

Production costs (18,300 units):
Direct materials	$179,400
Direct labor	228,200
Variable factory overhead	254,800
Fixed factory overhead	101,600	$764,000
Operating expenses:
Variable operating expenses	$134,000
Fixed operating expenses	48,700	182,700

If 1,700 units remain unsold at the end of the month and sales total $1,070,000 for the month, what would be the amount of income from operations reported on the absorption costing income statement?

a.$194,416

b.$61,534

c.$184,834

d.$70,973

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