A business operated at 100% of capacity during its first month, with the following results: Sales (107 units) $577,800 Production costs (134 units): Direct materials $78,221 Direct labor 19,971 Variable factory overhead 34,950 Fixed factory overhead 33,286 166,428 Operating expenses: Variable operating expenses $5,953 Fixed operating expenses 4,852 10,805 The amount of gross profit that would be reported on the absorption costing income statement is a.$577,666 b.$434,101 c.$444,906 d.$438,953
A business operated at 100% of capacity during its first month, with the following results: Sales (107 units) $577,800 Production costs (134 units): Direct materials $78,221 Direct labor 19,971 Variable factory overhead 34,950 Fixed factory overhead 33,286 166,428 Operating expenses: Variable operating expenses $5,953 Fixed operating expenses 4,852 10,805 The amount of gross profit that would be reported on the absorption costing income statement is a.$577,666 b.$434,101 c.$444,906 d.$438,953
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A business operated at 100% of capacity during its first month, with the following results:
Sales (107 units) | $577,800 | |
Production costs (134 units): | ||
Direct materials | $78,221 | |
Direct labor | 19,971 | |
Variable factory |
34,950 | |
Fixed factory overhead | 33,286 | 166,428 |
Operating expenses: | ||
Variable operating expenses | $5,953 | |
Fixed operating expenses | 4,852 | 10,805 |
The amount of gross profit that would be reported on the absorption costing income statement is
a.$577,666
b.$434,101
c.$444,906
d.$438,953
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