Andy's Water Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: Production manager salary: 12,000 hours @ $20 per hr. $100,000 $48,000 Factory rent: Equipment maintenance: $20,000 (considered a variable expense) Equipment depreciation: Production for the year: Total Revenue: Total aquariums sold during the period: $20,000 12,000 units $2,000,000 15,000 units Operating Income under variable costing (after non-production expenses): $408,000 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under absorption costing? (Round per-unit costs to the nearest cent.) Select one: O a. None of these options are correct. о b. $366,000 O c. $454,980 O d. $361,020 0 e. $450,000 https://mybusinesscourse.com/platform/

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Andy's Water Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year:
Direct labor:
Production manager salary:
12,000 hours @ $20 per hr.
$100,000
$48,000
Factory rent:
Equipment maintenance:
$20,000 (considered a variable expense)
Equipment depreciation:
Production for the year:
Total Revenue:
Total aquariums sold during the period:
$20,000
12,000 units
$2,000,000
15,000 units
Operating Income under variable costing (after non-production expenses): $408,000
Assume that the fixed costs were the same on a per-unit basis during the prior period.
What would Operating Income be under absorption costing? (Round per-unit costs to the nearest cent.)
Select one:
O
a. None of these options are correct.
о
b. $366,000
O
c. $454,980
O
d. $361,020
0
e. $450,000
https://mybusinesscourse.com/platform/
Transcribed Image Text:Andy's Water Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: Production manager salary: 12,000 hours @ $20 per hr. $100,000 $48,000 Factory rent: Equipment maintenance: $20,000 (considered a variable expense) Equipment depreciation: Production for the year: Total Revenue: Total aquariums sold during the period: $20,000 12,000 units $2,000,000 15,000 units Operating Income under variable costing (after non-production expenses): $408,000 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under absorption costing? (Round per-unit costs to the nearest cent.) Select one: O a. None of these options are correct. о b. $366,000 O c. $454,980 O d. $361,020 0 e. $450,000 https://mybusinesscourse.com/platform/
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