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:$65,000Factory rent:$31,200Equipment maintenance:$13,000 (considered a variable expense)Equipment depreciation:$13,000Production for the year:12,000 unitsTotal Revenue:$1,300,000Total aquariums sold during the period:15,000 unitsOperating Income under absorption costing (after non-production expenses):$265,200Assume 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. $292,500c. $295,737d. $237,900e. $234,663

Absorption costing is a method of costing in which product cost is calculated by adding direct…

Answered: Aquatic Pets Inc. makes 100-gallon…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 28P: Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed...

See similar textbooks

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 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

Expert Solution

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Financial Reporting in Hyperinflationary Economies

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.

Similar questions