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income reported on the absorption costing income statement

income reported on the absorption costing income statement

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A4

A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,500 units): Line Item Description Amount Amount Direct materials $176,800 Direct labor 230, 900 Variable factory overhead 253, 300 Fixed factory overhead 103, 300 Total production costs $764, 300 Operating expenses: Variable operating expenses $134, 100 Fixed operating expenses 41,300 175, 400 Total operating expenses 175,400 If 2,000 units remain unsold at the end of the month and sales total $1, 113,000 for the month, the amount of operating income reported on the absorption costing income statement would be a. $247,920 b. $237, 788 c. $74,566 d. $64, 488
Transcribed Image Text:A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,500 units): Line Item Description Amount Amount Direct materials $176,800 Direct labor 230, 900 Variable factory overhead 253, 300 Fixed factory overhead 103, 300 Total production costs $764, 300 Operating expenses: Variable operating expenses $134, 100 Fixed operating expenses 41,300 175, 400 Total operating expenses 175,400 If 2,000 units remain unsold at the end of the month and sales total $1, 113,000 for the month, the amount of operating income reported on the absorption costing income statement would be a. $247,920 b. $237, 788 c. $74,566 d. $64, 488
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