A business operated at 100% of capacity during its first month, with the following results: Sales (104 units) $436,800 Production costs (130 units): Direct materials $59,023 Direct labor 15,070 Variable factory overhead 26,372 Fixed factory overhead 25,115 125,580 Operating expenses: Variable operating expenses $5,199 Fixed operating expenses 4,413 9,612 The amount of operating income that would be reported on the absorption costing income statement is a.$346,816 b.$351,229 c.$436,670 d.$326,725
A business operated at 100% of capacity during its first month, with the following results: Sales (104 units) $436,800 Production costs (130 units): Direct materials $59,023 Direct labor 15,070 Variable factory overhead 26,372 Fixed factory overhead 25,115 125,580 Operating expenses: Variable operating expenses $5,199 Fixed operating expenses 4,413 9,612 The amount of operating income that would be reported on the absorption costing income statement is a.$346,816 b.$351,229 c.$436,670 d.$326,725
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) | $436,800 | |
| Production costs (130 units): | ||
| Direct materials | $59,023 | |
| Direct labor | 15,070 | |
| Variable factory |
26,372 | |
| Fixed factory overhead | 25,115 | 125,580 |
| Operating expenses: | ||
| Variable operating expenses | $5,199 | |
| Fixed operating expenses | 4,413 | 9,612 |
The amount of operating income that would be reported on the absorption costing income statement is
a.$346,816
b.$351,229
c.$436,670
d.$326,725
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