Aquatic Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: 7,800 hours @ $20 per hr. Production manager salary: $65,000 Factory rent: $31,200 Equipment maintenance: $13,000 (considered a variable expense) Equipment depreciation: $13,000 Production for the year: 12,000 units Total Revenue: $1,300,000 Total aquariums sold during the period: 15,000 units Operating Income under absorption costing (after non-production expenses): $265,200 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.) Select one: a. None of these options are correct. b. $292,500 c. $295,737 d. $237,900 e. $234,663
Aquatic Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: 7,800 hours @ $20 per hr. Production manager salary: $65,000 Factory rent: $31,200 Equipment maintenance: $13,000 (considered a variable expense) Equipment depreciation: $13,000 Production for the year: 12,000 units Total Revenue: $1,300,000 Total aquariums sold during the period: 15,000 units Operating Income under absorption costing (after non-production expenses): $265,200 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.) Select one: a. None of these options are correct. b. $292,500 c. $295,737 d. $237,900 e. $234,663
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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Aquatic Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year:
Direct labor: | 7,800 hours @ $20 per hr. |
Production manager salary: | $65,000 |
Factory rent: | $31,200 |
Equipment maintenance: | $13,000 (considered a variable expense) |
Equipment |
$13,000 |
Production for the year: | 12,000 units |
Total Revenue: | $1,300,000 |
Total aquariums sold during the period: | 15,000 units |
Operating Income under absorption costing (after non-production expenses): | $265,200 |
Assume that the fixed costs were the same on a per-unit basis during the prior period.
What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.)
Select one:
a. None of these options are correct.
b. $292,500
c. $295,737
d. $237,900
e. $234,663
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