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Wet Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: Production manager salary: Factory rent: Equipment maintenance: Equipment depreciation: Production for the year: Total Revenue: Total aquariums sold during the period: Operating Income under absorption costing (after non-production expenses): 7,200 hours @ $20 per hr. $60,000 $28,800 $12,000 (considered a variable expense) $12,000 12,000 units $1,200,000 10,000 units $244,800 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.) Select one: a. $226,000

Wet Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: Production manager salary: Factory rent: Equipment maintenance: Equipment depreciation: Production for the year: Total Revenue: Total aquariums sold during the period: Operating Income under absorption costing (after non-production expenses): 7,200 hours @ $20 per hr. $60,000 $28,800 $12,000 (considered a variable expense) $12,000 12,000 units $1,200,000 10,000 units $244,800 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.) Select one: a. $226,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Wet Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: Production manager salary: Factory rent: Equipment maintenance: Equipment depreciation: Production for the year: Total Revenue: Total aquariums sold during the period: Operating Income under absorption costing (after non-production expenses): 7,200 hours @ $20 per hr. $60,000 $28,800 $12,000 (considered a variable expense) $12,000 12,000 units a. $226,000 b. $228,000 c. $263,592 d. None of these options are correct. e. $261,600 $1,200,000 10,000 units $244,800 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.) Select one:
Transcribed Image Text:Wet Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: Production manager salary: Factory rent: Equipment maintenance: Equipment depreciation: Production for the year: Total Revenue: Total aquariums sold during the period: Operating Income under absorption costing (after non-production expenses): 7,200 hours @ $20 per hr. $60,000 $28,800 $12,000 (considered a variable expense) $12,000 12,000 units a. $226,000 b. $228,000 c. $263,592 d. None of these options are correct. e. $261,600 $1,200,000 10,000 units $244,800 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.) Select one:
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