Aquamarine Company has the following information for the month of May of the cur

ID: 2575340 • Letter: A

Question

Aquamarine Company has the following information for the month of May of the current year: Selling price Variable production costs Variable selling and admin. expenses Fixed production costs per unit Fixed selling and admin. expenses Units produced Units sold S220 per unit S90 per unit produc S25 per unit sold S52 per unit S350,000 12,000 units 11,500 units There were no beginning inventories Compute Aquamarine's operating income for the month of May using the absorption-costing method. $150,000 $609,500 $897,000 $259,500

Explanation / Answer

Answer = $259,500

operating income for the month of may under absorption costing

particulars

amount

sales revenue

(220*11,500)

$ 25,30,000

less: marginal cost of sales

1)variable production costs(90*11500)

$ 10,35,000

2)variable selling and admi. Ex(25*11500)

$ 2,87,500

3)fixed production costs(52*11500)

$ 5,98,000

4)fixed selling and admini.exp.

$ 3,50,000

($22,70,500)

operating income under absorption costing

$259,500