A business operated at 100% of capacity during its first month and incurred the following costs:Production costs (10,000 units):Direct materialsDirect labor$170,000360,000Variable factory overhead190,000Fixed factory overhead50,000$770,000Operating expenses:Variable operating expensesFixed operating expenses$60,00018,00078,000If 500 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet isa. $36,000b. $41,500c. $38,500d. $42,800

Step 1: Variable costing balance sheet :Under variable costing method, cost of inventories include…

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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