A business operated at 100% of capacity during its first month, with the following results: Sales (100 units)   $510,000 Production costs (125 units):      Direct materials $68,914      Direct labor 17,595      Variable factory overhead 30,791      Fixed factory overhead 29,325 146,625   Operating expenses:      Variable operating expenses $5,255      Fixed operating expenses 3,726 8,981 The amount of gross profit that would be reported on the absorption costing income statement is a.$383,719 b.$387,445 c.$392,700 d.$509,875

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A business operated at 100% of capacity during its first month, with the following results:

Sales (100 units)   $510,000
Production costs (125 units):  
   Direct materials $68,914  
   Direct labor 17,595  
   Variable factory overhead 30,791  
   Fixed factory overhead 29,325 146,625
 
Operating expenses:  
   Variable operating expenses $5,255  
   Fixed operating expenses 3,726 8,981

The amount of gross profit that would be reported on the absorption costing income statement is

a.$383,719
b.$387,445
c.$392,700
d.$509,875 
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