A business operated at 100% of capacity during its first month, with the following results: Sales (80 units) $80,000 Production costs (100 units): Direct materials $50,000 Direct labor 10,000 Variable factory overhead 5,000 Fixed factory overhead 2,000 67,000 Operating expenses: Variable operating expenses $6,000 Fixed operating expenses 1,000 7,000 What is the amount of the gross profit that would be reported on the absorption costing income statement? a. $19,400 b. $26,400 c. $21,000 d. $22,000

A business operated at 100% of capacity during its first month, with the following results: Sales (80 units) $80,000 Production costs (100 units): Direct materials $50,000 Direct labor 10,000 Variable factory overhead 5,000 Fixed factory overhead 2,000 67,000 Operating expenses: Variable operating expenses $6,000 Fixed operating expenses 1,000 7,000 What is the amount of the gross profit that would be reported on the absorption costing income statement? a. $19,400 b. $26,400 c. $21,000 d. $22,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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