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 absorption costing income statement? Group of answer choices $237,000 $357,000 $629,000 $986,000
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 absorption costing income statement? Group of answer choices $237,000 $357,000 $629,000 $986,000
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 absorption costing income statement?
Group of answer choices
$237,000
$357,000
$629,000
$986,000
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education