A business operated at 100% of capacity during its first month and incurred the

Question

A business operated at 100% of capacity during its first month and incurred the following costs:

If 1,700 units remain unsold at the end of the month and sales total $1,046,000 for the month, what would be the amount of income from operations reported on the absorption costing income statement?

a.$63,664

b.$182,084

c.$72,584

d.$173,164

Production costs (17,800 units): ??? Direct materials $181,500 ??? Direct labor 224,300 ??? Variable factory overhead 260,800 ??? Fixed factory overhead 93,400 $760,000 Operating expenses: ??? Variable operating expenses $130,800 ??? Fixed operating expenses 45,700 176,500

Explanation / Answer

Sales 1046000 Cost of goods sold: Direct materials 181500 Direct labor 224300 Variable factory overhead 260800 Fixed factory overhead 93400 Total production costs 760000 Less: Ending inventory 72584 Cost of goods sold 687416 Gross Margin 358584.3 Operating expenses 176500 Income from operations 182084 Option B is correct

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.