Rene Inc. has capacity to produce 15,000 units of inventory. It operated at capacity during the second quarter of the current year and provided the following cost data:Cost DataAccountsAmountsProduction costs (15,000 units):- Direct materials$150,000 Direct labor180,000 Variable manufacturing overhead120,000 Fixed manufacturing overhead45,000Total production costs$495,000Operating expenses:- Variable operating expenses$60,000 Fixed operating expenses40,000Total operating expenses$100,000There was no inventory on hand at the beginning of the quarter. 2,000 units remained unsold at the end of the quarter.The COGS to be reported on the income statement for the second quarter under absorption costing method is:Group of answer choices$429,000$515,667.67$442,000$390,000

The objective of the question is to calculate the Cost of Goods Sold (COGS) for the second quarter…

Answered: Rene Inc. has capacity to produce…

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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Question

Rene Inc. has capacity to produce 15,000 units of inventory. It operated at capacity during the second quarter of the current year and provided the following cost data:

Cost Data

Accounts	Amounts
Production costs (15,000 units):	-
Direct materials	$150,000
Direct labor	180,000
Variable manufacturing overhead	120,000
Fixed manufacturing overhead	45,000
Total production costs	$495,000
Operating expenses:	-
Variable operating expenses	$60,000
Fixed operating expenses	40,000
Total operating expenses	$100,000