Question

In: Accounting

A business operated at 100% of capacity during its first month, with the following results: Sales...

A business operated at 100% of capacity during its first month, with the following results:

Sales (106 units) $498,200
Production costs (132 units):
   Direct materials $67,065
   Direct labor 17,123
   Variable factory overhead 29,965
   Fixed factory overhead 28,539 142,692
Operating expenses:
   Variable operating expenses $6,403
   Fixed operating expenses 4,854 11,257

The amount of operating income that would be reported on the absorption costing income statement is

a.$395,275

b.$400,129

c.$372,357

d.$498,068

Solutions

Expert Solution

Correct option is: C. $372,357
Workings:
Under Absorption Costing
Unit product cost:
Direct Material (67065/132) $             508
Direct Labour (17123/132) $             130
Variable Manufaturing overhead (29965/132) $             227
Fixed Manufacturing overhead (28539/132) $             216
Unit product cost $         1,081
Absorbtion Costing Income Statement
Sales $   4,98,200
Less: Cost of Goods Sold (106 X $1081) $   1,14,586
Gross Margin $   3,83,614
Less: Operating expenses:
Variable Operating expenses $         6,403
Fixed Operating expenses $         4,854
Net Operating Income $   3,72,357

If it is helpful, please rate the answer and if any doubt arises let me know

ekkarill92 answered 3 years ago
Next > < Previous

Related Solutions

A business operated at 100% of capacity during its first month, with the following results: Sales...
A business operated at 100% of capacity during its first month, with the following results: Sales (112 units) $560,000 Production costs (140 units):    Direct materials $70,000    Direct labor 17,500    Variable factory overhead 31,500    Fixed factory overhead 28,000 147,000 Operating expenses:    Variable operating expenses $5,860    Fixed operating expenses 3,680 9,540 The amount of operating income that would be reported on the variable costing income statement is a.$559,860 b.$427,260 c.$458,940 d.$550,460
1. A business operated at 100% of capacity during its first month, with the following results:...
1. A business operated at 100% of capacity during its first month, with the following results: Sales (114 units) $638,400 Production costs (142 units):    Direct materials $85,961    Direct labor 21,948    Variable factory overhead 38,408    Fixed factory overhead 36,579 182,896 Operating expenses:    Variable operating expenses $5,576    Fixed operating expenses 4,166 9,742 The amount of operating income that would be reported on the absorption costing income statement is a. $638,258 b. $511,192 c. $515,358 d. $481,826 2. Myers Corporation has the following...
A business operated at 100% of capacity during its first month and incurred the following costs:...
A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (18,600 units): Direct materials $172,100 Direct labor 234,800 Variable factory overhead 267,600 Fixed factory overhead 100,300 $774,800 Operating expenses: Variable operating expenses $131,500 Fixed operating expenses 46,900 178,400 If 1,800 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet? The actual price for a product was...
A business operated at 100% of capacity during its first month and incurred the following costs:...
A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (18,100 units): Direct materials $171,800 Direct labor 220,400 Variable factory overhead 256,100 Fixed factory overhead 102,000 $750,300 Operating expenses: Variable operating expenses $128,600 Fixed operating expenses 43,000 171,600 If 1,600 units remain unsold at the end of the month and sales total $1,143,000 for the month, what would be the amount of income from operations reported on the variable costing income statement?...
1. A business operated at 100% of capacity during its first month and incurred the following...
1. A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (17,100 units):     Direct materials $171,800     Direct labor 237,200     Variable factory overhead 264,600     Fixed factory overhead 97,600 $771,200 Operating expenses:     Variable operating expenses $127,300     Fixed operating expenses 40,600 167,900 If 1,800 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet? a.$84,305 b.$81,179 c.$98,853 d.$70,902 2. A...
A business operated at 100% of capacity during its first month and incurred the following costs:...
A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (10,000 units):   Direct materials $170,000   Direct labor 360,000   Variable factory overhead 190,000   Fixed factory overhead     50,000 $770,000 Operating expenses:   Variable operating expenses $ 60,000   Fixed operating expenses     18,000 78,000 If 500 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet? a.$41,500 b.$42,800 c.$38,500 d.$36,000
A business operated at 100% of capacity during its first month and incurred the following costs:...
A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (5,000 units): Direct materials-$70,000 Direct labor-20,000 Variable factory overhead-10,000 Fixed factory overhead-20,000 total $102,000 Operating expenses: Variable operating expenses-$17,000 Fixed operating expenses-1,000 total $18000 Prepare a variable income statement assuming 1000 units remain unsold at the end of the month and sales total $160,000 for the month
13. A. A business operated at 100% of capacity during its first month and incurred the...
13. A. A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,700 units):     Direct materials $172,500     Direct labor 232,400     Variable factory overhead 259,600     Fixed factory overhead 97,500 $762,000 Operating expenses:     Variable operating expenses $134,200     Fixed operating expenses 46,900 181,100 If 1,600 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet? a. $51,360 b. $61,735 c....
41. 1 . a business operated at 100% of capacity during its first month and incurred...
41. 1 . a business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,200 units): Direct materials $177,700 Direct labor 221,800 Variable factory overhead 268,100 Fixed factory overhead 92,500 $760,100 Operating expenses: Variable operating expenses $132,800 Fixed operating expenses 40,800 173,600 If 1,900 units remain unsold at the end of the month and sales total $1,081,000 for the month, what would be the amount of income from operations reported on the absorption...
A company had the following purchases and sales during its first month of operations: January 1:
A company had the following purchases and sales during its first month of operations:   January 1: Purchased 10 units at $400 per unit; January 9: Sold 6 units at $1200 per unit; January 17: Purchased 8 units at $550 per unit; January 27: Sold 7 units at $1200 per unit   Using the Periodic weighted average method, what is the value of cost of goods sold? (Round weighted average cost per unit to 2 decimal places)
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT