Aquatic Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: 7,800 hours @ $20 per hr. Production manager salary: $65,000 Factory rent: $31,200 Equipment maintenance: $13,000 (considered a variable expense) Equipment depreciation: $13,000 Production for the year: 12,000 units Total Revenue: $1,300,000 Total aquariums sold during the period: 15,000 units Operating Income under absorption costing (after non-production expenses): $265,200 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.) Select one: a. None of these options are correct. b. $292,500 c. $295,737 d. $237,900 e. $234,663
Aquatic Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: 7,800 hours @ $20 per hr. Production manager salary: $65,000 Factory rent: $31,200 Equipment maintenance: $13,000 (considered a variable expense) Equipment depreciation: $13,000 Production for the year: 12,000 units Total Revenue: $1,300,000 Total aquariums sold during the period: 15,000 units Operating Income under absorption costing (after non-production expenses): $265,200 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.) Select one: a. None of these options are correct. b. $292,500 c. $295,737 d. $237,900 e. $234,663
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Aquatic Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year:
| Direct labor: | 7,800 hours @ $20 per hr. |
| Production manager salary: | $65,000 |
| Factory rent: | $31,200 |
| Equipment maintenance: | $13,000 (considered a variable expense) |
| Equipment |
$13,000 |
| Production for the year: | 12,000 units |
| Total Revenue: | $1,300,000 |
| Total aquariums sold during the period: | 15,000 units |
| Operating Income under absorption costing (after non-production expenses): | $265,200 |
Assume that the fixed costs were the same on a per-unit basis during the prior period.
What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.)
Select one:
a. None of these options are correct.
b. $292,500
c. $295,737
d. $237,900
e. $234,663
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education