Sales (90 units)   $90,000 Production costs (100 units)        Direct materials $40,000      Direct labor  20,000      Variable factory overhead    2,000      Fixed factory overhead    7,000            Total manufacturing costs    69,000 Operating expenses:        Variable         Variable operating expenses $ 8,000       Fixed operating expenses   1,000             Total operating expenses     9,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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5. A business operated at 100% capacity during its first month of operations, with the following results:

 

Sales (90 units)

 

$90,000

Production costs (100 units)

 

 

   Direct materials

$40,000

 

   Direct labor

 20,000

 

   Variable factory overhead

   2,000

 

   Fixed factory overhead

   7,000

 

         Total manufacturing costs

 

 69,000

Operating expenses:

 

 

   Variable

 

 

    Variable operating expenses

$ 8,000

 

    Fixed operating expenses

  1,000

 

          Total operating expenses

 

  9,000

 

Use this information to complete a variable costing income statement.

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