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.

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)

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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