A business operated at 100% of capacity during its first month, with the following results: Line Item Description Amount Amount Sales (104 units) $520,000 Production costs (130 units): Direct materials $65,000 Direct labor 16,250 Variable factory overhead 29,250 Fixed factory overhead 26,000 Total production costs $136,500 Operating expenses: Variable operating expenses $5,590 Fixed operating expenses 4,080 Total operating expenses 9,670 The amount of operating income that would be reported on the variable costing income statement is a. $395,930 b. $510,330 c. $426,010 d. $519,870
A business operated at 100% of capacity during its first month, with the following results: Line Item Description Amount Amount Sales (104 units) $520,000 Production costs (130 units): Direct materials $65,000 Direct labor 16,250 Variable factory overhead 29,250 Fixed factory overhead 26,000 Total production costs $136,500 Operating expenses: Variable operating expenses $5,590 Fixed operating expenses 4,080 Total operating expenses 9,670 The amount of operating income that would be reported on the variable costing income statement is a. $395,930 b. $510,330 c. $426,010 d. $519,870
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 3CE: Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month...
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Question
A business operated at 100% of capacity during its first month, with the following results:
Line Item Description | Amount | Amount |
---|---|---|
Sales (104 units) | $520,000 | |
Production costs (130 units): | ||
Direct materials | $65,000 | |
Direct labor | 16,250 | |
Variable factory overhead | 29,250 | |
Fixed factory overhead | 26,000 | |
Total production costs | $136,500 | |
Operating expenses: | ||
Variable operating expenses | $5,590 | |
Fixed operating expenses | 4,080 | |
Total operating expenses | 9,670 |
The amount of operating income that would be reported on the variable costing income statement is
a. $395,930
b. $510,330
c. $426,010
d. $519,870
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