Garcia Inc. has capacity to produce 20,000 units of inventory. It operated at 100% capacity during the second quarter of the current year and provided the following cost data: Cost Data Production costs (20,000 units): Units $ per unit Total $ Direct materials 20,000 $9 $180,000 Direct labor 20,000 16 $320,000 Variable factory overhead 20,000 7 $140,000 Fixed factory overhead 20,000 5 $100,000 Total production costs - - $740,000 Operating expenses: - - - Variable selling and administrative expenses 17,000 4 $68,000 Fixed selling and administrative expenses - - $52,000 Total operating expenses - - $120,000 There was no inventory on hand at the beginning of the quarter. If 17,000 units are sold during the quarter at a price of $58 per unit, what would be the amount of operating income to be reported in the variable costing income statement? Group of answer choices $222,000 $357,000 $986,000 $374,000
Garcia Inc. has capacity to produce 20,000 units of inventory. It operated at 100% capacity during the second quarter of the current year and provided the following cost data: Cost Data Production costs (20,000 units): Units $ per unit Total $ Direct materials 20,000 $9 $180,000 Direct labor 20,000 16 $320,000 Variable factory overhead 20,000 7 $140,000 Fixed factory overhead 20,000 5 $100,000 Total production costs - - $740,000 Operating expenses: - - - Variable selling and administrative expenses 17,000 4 $68,000 Fixed selling and administrative expenses - - $52,000 Total operating expenses - - $120,000 There was no inventory on hand at the beginning of the quarter. If 17,000 units are sold during the quarter at a price of $58 per unit, what would be the amount of operating income to be reported in the variable costing income statement? Group of answer choices $222,000 $357,000 $986,000 $374,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Garcia Inc. has capacity to produce 20,000 units of inventory. It operated at 100% capacity during the second quarter of the current year and provided the following cost data:
Cost Data| Production costs (20,000 units): | Units | $ per unit | Total $ |
|---|---|---|---|
| Direct materials | 20,000 | $9 | $180,000 |
| Direct labor | 20,000 | 16 | $320,000 |
| Variable factory |
20,000 | 7 | $140,000 |
| Fixed factory overhead | 20,000 | 5 | $100,000 |
| Total production costs | - | - | $740,000 |
| Operating expenses: | - | - | - |
| Variable selling and administrative expenses | 17,000 | 4 | $68,000 |
| Fixed selling and administrative expenses | - | - | $52,000 |
| Total operating expenses | - | - | $120,000 |
There was no inventory on hand at the beginning of the quarter. If 17,000 units are sold during the quarter at a price of $58 per unit, what would be the amount of operating income to be reported in the variable costing income statement?
Group of answer choices
$222,000
$357,000
$986,000
$374,000
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