Question: 7 Smooch Incorporated, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 97 Units in beginning inventory 500 Units produced 8,400 Units sold 8,500 Units in ending inventory 400 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 20 $ 37 $ 1 $ 11 Fixed costs: Fixed manufacturing overhead $ 67,200 Fixed selling and administrative $1,61,500 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. What is the net operating income for the month under absorption costing? a. $8,500 b. $9,300 c. $3,200 d. $15,100

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question: 7
Smooch Incorporated, which has only one product, has provided the
following data concerning its most recent month of operations:
Selling price
$ 97
Units in beginning inventory
500
Units produced
8,400
Units sold
8,500
Units in ending inventory
400
Variable costs per unit:
Direct materials
Direct labor
Variable manufacturing overhead
Variable selling and administrative
$ 20
$ 37
$ 1
$ 11
Fixed costs:
Fixed manufacturing overhead
$ 67,200
Fixed selling and administrative
$1,61,500
The company produces the same number of units every month,
although the sales in units vary from month to month. The company's
variable costs per unit and total fixed costs have been constant from
month to month.
What is the net operating income for the month under absorption
costing?
a. $8,500
b. $9,300
c. $3,200
d. $15,100
Transcribed Image Text:Question: 7 Smooch Incorporated, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 97 Units in beginning inventory 500 Units produced 8,400 Units sold 8,500 Units in ending inventory 400 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 20 $ 37 $ 1 $ 11 Fixed costs: Fixed manufacturing overhead $ 67,200 Fixed selling and administrative $1,61,500 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. What is the net operating income for the month under absorption costing? a. $8,500 b. $9,300 c. $3,200 d. $15,100
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