A manufacturing company that produces a single product has provided the followin

Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations Selling price $112 Units in beginning inventory Units produced Units sold Units in ending inventory 0 5,500 5,300 200 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $33 $37 $5 $6 Fixed costs Fixed manufacturing overhead Fixed selling and administrative $71,500 $79,500 What is the net operating income for the month under absorption costing? O $13.300 O $2.600 O (S1.700) O $15,900

Explanation / Answer

Fixed manufacturing overhead per unit = 71,500 / 5,500 = 13

Sales revenues (5,300*112) 593,600 Cost of goods sold Beginning inventory 0 Variable manufacturing costs (5,500*75) 412,500 Fixed manufacturing costs (5,500*13) 71,500 Cost of goods available for sale 484,000 Ending inventory [(75+13)*200] (17,600) Cost of goods sold 466,400 Gross margin 127,200 Operating costs Variable selling and administrative costs (5,300*6) 31,800 Fixed selling and administrative 79,500 Total operating costs 111,300 Operating income 15,900

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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