Question

Hyper Color Company manufactures widgets. The following data is related to sales and production of the widgets for last year.  

Selling price per unit	$150
Variable manufacturing costs per unit	$63
Variable selling and administrative expenses per unit	$8
Fixed manufacturing overhead (in total)	$34,000
Fixed selling and administrative expenses (in total)	$9000
Units produced during the year	1700
Units sold during year	1000

  
Using absorption costing, what is operating income for last year? (Round any intermediary calculations to the nearest whole dollar.)

		$50,000
		$232,000
		$216,000
		$150,000

Answer 1

Correct answer----------$50,000

Working

Absorption Costing Income Statement
Sales		$          150,000.00
Cost of goods sold:		$ 83000.00
Gross Profits		$             67,000.00
Total Selling & Admini expense		$             17,000.00
Income from operations		$             50,000.00

Variable manufacturing cost	$             63.00
Fixed manufacturing cost per unit	$             20.00
Total cost per unit	$             83.00
Units sold	1000
Cost of goods sold	$    83,000.00