.A business operated at 100% of capacity during its first month, with the following results: Sales (112 units)   $560,000 Production costs (140 units):      Direct materials $70,000      Direct labor 17,500      Variable factory overhead 31,500      Fixed factory overhead 28,000 147,000 Operating expenses:      Variable operating expenses $6,120      Fixed operating expenses 3,230 9,350 The amount of operating income that would be reported on the variable costing income statement is a.$427,450 b.$458,680 c.$559,860 d.$550,650

Question

5.A business operated at 100% of capacity during its first month, with the following results:

Sales (112 units)   $560,000
Production costs (140 units):  
   Direct materials $70,000  
   Direct labor 17,500  
   Variable factory overhead 31,500  
   Fixed factory overhead 28,000 147,000
Operating expenses:  
   Variable operating expenses $6,120  
   Fixed operating expenses 3,230 9,350

The amount of operating income that would be reported on the variable costing income statement is

a.$427,450
b.$458,680
c.$559,860
d.$550,650

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