A business operated at 100% of capacity during its first month, with the following results:Sales (104 units) $520,000Production costs (130 units): Direct materials$65,000 Direct labor16,250 Variable factory overhead29,250 Fixed factory overhead26,000136,500 Operating expenses: Variable operating expenses$6,270 Fixed operating expenses3,76010,030What is the amount of the income from operations that would be reported on the variable costing income statement?

In variable costing statement ,we will value the inventory at variable factory cost . Fixed factory…

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	$6,270
Fixed operating expenses	3,760	10,030

What is the amount of the income from operations that would be reported on the variable costing income statement?

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