Sofie Manufacturers produces decorative pillows and sells them at $98 per unit. In the first month of operation, 1,880 units were produced and 1,720 units were sold. Actual fixed costs are the same as the amount budgeted for the month and the per unit administration cost for production is provided below. Other information for the month includes: $23.49 per unit Variable manufacturing costs Variable marketing costs $5.54 per unit Fixed manufacturing costs $14.80 per unit Administrative expenses, all fixed $7.53 per unit Ending inventories: Direct materials -0- WIP -0- Finished goods 160 units What is the operating income of the business in the first month of operation using the absorption costing method?
Sofie Manufacturers produces decorative pillows and sells them at $98 per unit. In the first month of operation, 1,880 units were produced and 1,720 units were sold. Actual fixed costs are the same as the amount budgeted for the month and the per unit administration cost for production is provided below. Other information for the month includes: $23.49 per unit Variable manufacturing costs Variable marketing costs $5.54 per unit Fixed manufacturing costs $14.80 per unit Administrative expenses, all fixed $7.53 per unit Ending inventories: Direct materials -0- WIP -0- Finished goods 160 units What is the operating income of the business in the first month of operation using the absorption costing method?
Chapter7: Budgeting
Section: Chapter Questions
Problem 1PA: Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and...
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
Please do not give solution in image format thanku
![Sofie Manufacturers produces decorative pillows and sells them at $98 per unit. In the first month of operation, 1,880
units were produced and 1,720 units were sold. Actual fixed costs are the same as the amount budgeted for the month
and the per unit administration cost for production is provided below. Other information for the month includes:
$23.49 per unit
Variable manufacturing costs
Variable marketing costs $5.54 per unit
Fixed manufacturing costs
$14.80 per unit
Administrative expenses, all fixed $7.53 per unit
Ending inventories:
Direct materials -0-
WIP
-0-
Finished goods 160 units
What is the operating income of the business in the first month of operation using the absorption costing method?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2b411908-ba2c-481f-8476-e8607fd7e752%2Ff6331f3b-4423-4fec-abad-842e648453f1%2Fftqvruio_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Sofie Manufacturers produces decorative pillows and sells them at $98 per unit. In the first month of operation, 1,880
units were produced and 1,720 units were sold. Actual fixed costs are the same as the amount budgeted for the month
and the per unit administration cost for production is provided below. Other information for the month includes:
$23.49 per unit
Variable manufacturing costs
Variable marketing costs $5.54 per unit
Fixed manufacturing costs
$14.80 per unit
Administrative expenses, all fixed $7.53 per unit
Ending inventories:
Direct materials -0-
WIP
-0-
Finished goods 160 units
What is the operating income of the business in the first month of operation using the absorption costing method?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![Principles of Cost Accounting](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![Principles of Cost Accounting](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,