A business operated at 100% of capacity during its first month, with the following results: Sales (108 units) Production costs (135 units): $626,400 Direct materials $84,642 Direct labor 21,611 Variable factory overhead 37,819 Fixed factory overhead 36,018 180,090 Operating expenses: Variable operating expenses $5,253 Fixed operating expenses 4,584 9,837 The amount of gross profit that would be reported on the absorption costing income statement is: a. $472,491. b. $482,328. c. $477,075. d. $626,265.

Cornerstones of Cost Management (Cornerstones Series)
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Chapter2: Basic Cost Management Concepts
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Managerial accounting

A business operated at 100% of capacity during its first month, with the following results:
Sales (108 units)
Production costs (135 units):
$626,400
Direct materials
$84,642
Direct labor
21,611
Variable factory overhead
37,819
Fixed factory overhead
36,018
180,090
Operating expenses:
Variable operating expenses
$5,253
Fixed operating expenses
4,584
9,837
The amount of gross profit that would be reported on the absorption costing income statement is:
a. $472,491.
b. $482,328.
c. $477,075.
d. $626,265.
Transcribed Image Text:A business operated at 100% of capacity during its first month, with the following results: Sales (108 units) Production costs (135 units): $626,400 Direct materials $84,642 Direct labor 21,611 Variable factory overhead 37,819 Fixed factory overhead 36,018 180,090 Operating expenses: Variable operating expenses $5,253 Fixed operating expenses 4,584 9,837 The amount of gross profit that would be reported on the absorption costing income statement is: a. $472,491. b. $482,328. c. $477,075. d. $626,265.
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