A business operated at 100% of capacity dunng its first month, with the followin
ID: 2589261 • Letter: A
Question
A business operated at 100% of capacity dunng its first month, with the following results: Sales (115 units) Production costs (144 units): $667,000 Direct materials Direct lat Variable factory overhead Fixed factory overhead $90,285 23,052 40,340 38,419 192,096 Operating expenses $5,601 3,990 Variable operating expenses Fixed operating expenses What is the amount of the Oa. $507,989 Ob. $666,856 @c. $513,590 Od. $503,999 9,591 gross profit that would be reported on the absorption costing income statement?Explanation / Answer
Option C is correct=$513,590
Explanation:
Production cost of 115 units=(192,096/144)×115
=$153,410
Gross profit=sale -cost of good sold
=$667,000-$153,410
=$513,590
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