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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
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
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
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
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education