A business operated at 100% of capacity during its first month, with the following results: Line Item Description Amount Amount Sales (104 units) $520,000 Production costs (130 units): Direct materials $65,000 Direct labor 16,250 Variable factory overhead 29,250 Fixed factory overhead 26,000 Total production costs $136,500 Operating expenses: Variable operating expenses $5,790 Fixed operating expenses 3,560 Total operating expenses 9,350 The amount of contribution margin that would be reported on the variable costing income statement is a. $422,250 b. $425,810 c. $519,870 d. $510,650
A business operated at 100% of capacity during its first month, with the following results: Line Item Description Amount Amount Sales (104 units) $520,000 Production costs (130 units): Direct materials $65,000 Direct labor 16,250 Variable factory overhead 29,250 Fixed factory overhead 26,000 Total production costs $136,500 Operating expenses: Variable operating expenses $5,790 Fixed operating expenses 3,560 Total operating expenses 9,350 The amount of contribution margin that would be reported on the variable costing income statement is a. $422,250 b. $425,810 c. $519,870 d. $510,650
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A business operated at 100% of capacity during its first month, with the following results:
| Line Item Description | Amount | Amount |
|---|---|---|
| Sales (104 units) | $520,000 | |
| Production costs (130 units): | ||
| Direct materials | $65,000 | |
| Direct labor | 16,250 | |
| Variable factory |
29,250 | |
| Fixed factory overhead | 26,000 | |
| Total production costs | $136,500 | |
| Operating expenses: | ||
| Variable operating expenses | $5,790 | |
| Fixed operating expenses | 3,560 | |
| Total operating expenses | 9,350 |
The amount of contribution margin that would be reported on the variable costing income statement is
a. $422,250
b. $425,810
c. $519,870
d. $510,650
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