Tech Wave Inc. operated at 100% capacity during its first month, with the following results: Sales (120 units): $120,000 Production Costs (150 units): -Direct Materials: $60,000 -Direct Labor: $30,000 -Variable Factory Overhead: $4,500 -Fixed Factory Overhead: $10,500 Operating Expenses: -Variable Operating Expenses: $12,000 -Fixed Operating Expenses: $2,000 What is the amount of the gross profit that would be reported on the absorption costing income statement? a. $36,000 b. $42,000 c. $40,500 d. $45,000

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2CMA
icon
Related questions
Question

Hey tutor please find the correct answer for this general accounting question

Tech Wave Inc. operated at 100% capacity during its first month, with the
following results:
Sales (120 units): $120,000
Production Costs (150 units):
-Direct Materials: $60,000
-Direct Labor: $30,000
-Variable Factory Overhead: $4,500
-Fixed Factory Overhead: $10,500
Operating Expenses:
-Variable Operating Expenses: $12,000
-Fixed Operating Expenses: $2,000
What is the amount of the gross profit that would be reported on the absorption
costing income statement?
a. $36,000
b. $42,000
c. $40,500
d. $45,000
Transcribed Image Text:Tech Wave Inc. operated at 100% capacity during its first month, with the following results: Sales (120 units): $120,000 Production Costs (150 units): -Direct Materials: $60,000 -Direct Labor: $30,000 -Variable Factory Overhead: $4,500 -Fixed Factory Overhead: $10,500 Operating Expenses: -Variable Operating Expenses: $12,000 -Fixed Operating Expenses: $2,000 What is the amount of the gross profit that would be reported on the absorption costing income statement? a. $36,000 b. $42,000 c. $40,500 d. $45,000
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning