A business operated at 100% of capacity during its first month, with the following results:Sales (90 units)$90,000Production costs (100 units):Direct materials$40,000Direct labor20,000Variable factory overhead2,000Fixed factory overhead7,00069,000Operating expenses:Variable operating expenses$8,000Fixed operating expenses1,00069,000The amount of contribution margin that would be reported on the variable costing income statement isO a. $20,200O b. $34,200c. $26,200O d. $29,7004

Variable costing: Sales $90,000Product cost (Variable manufacturing cost)$40,000 Direct…

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, with the following results: 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 26,000 136,500 Operating expenses: Variable operating expenses $5,770 Fixed operating expenses 3,540 9,310 The amount of contribution margin that would be reported on the variable costing income statement is a.$422,290 b.$510,690 c.$519,870 d.$425,830

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