Wet Pets Inc. makes Direct labor: Production manager salary: Factory rent: Equipment maintenance: Equipment depreciation: Production for the year: 6,600 hours @ $20 per hr $55,000 $26,400 $11,000 (considered a variable expense) $11,000 12,000 units Total Revenue: $1,100,000 Total aquariums sold during the period: 10,000 units Operating Income under absorption costing (after non-production expenses): $224,400 Assume that the fixed costs were the same on a per-unit basis during the prior period.
Wet Pets Inc. makes Direct labor: Production manager salary: Factory rent: Equipment maintenance: Equipment depreciation: Production for the year: 6,600 hours @ $20 per hr $55,000 $26,400 $11,000 (considered a variable expense) $11,000 12,000 units Total Revenue: $1,100,000 Total aquariums sold during the period: 10,000 units Operating Income under absorption costing (after non-production expenses): $224,400 Assume that the fixed costs were the same on a per-unit basis during the prior period.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...
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![Wet Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year:
Direct labor:
6,600 hours @ $20 per hr
Production manager salary:
$55,000
Factory rent:
$26,400
Equipment maintenance:
$11,000 (considered a variable expense)
Equipment depreciation:
$11,000
Production for the year:
12,000 units
Total Revenue:
$1,100,000
Total aquariums sold during the period:
10,000 units
Operating Income under absorption costing (after non-production expenses): $224,400
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:
O a. $209,000
b. $207,166
c. None of these options are correct.
OO
O d. $239,800
O
e. $241,626](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9be9518c-51b7-4bb1-8036-854b6000ee8b%2Ff441b2d6-9e83-42e1-ba4f-d1909c2391ab%2Fwc70qw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Wet Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year:
Direct labor:
6,600 hours @ $20 per hr
Production manager salary:
$55,000
Factory rent:
$26,400
Equipment maintenance:
$11,000 (considered a variable expense)
Equipment depreciation:
$11,000
Production for the year:
12,000 units
Total Revenue:
$1,100,000
Total aquariums sold during the period:
10,000 units
Operating Income under absorption costing (after non-production expenses): $224,400
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:
O a. $209,000
b. $207,166
c. None of these options are correct.
OO
O d. $239,800
O
e. $241,626
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