6.A business operated at 100% of capacity during its first month, with the following results: Sales (107 units)   $481,500 Production costs (134 units):      Direct materials $65,184      Direct labor 16,643      Variable factory overhead 29,125      Fixed factory overhead 27,738 138,690   Operating expenses:      Variable operating expenses $5,366      Fixed operating expenses 3,619 8,985 The amount of operating income that would be reported on the absorption costing income statement is a.$383,919 b.$481,366 c.$387,538 d.$361,770

Question

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

Sales (107 units)   $481,500
Production costs (134 units):  
   Direct materials $65,184  
   Direct labor 16,643  
   Variable factory overhead 29,125  
   Fixed factory overhead 27,738 138,690
 
Operating expenses:  
   Variable operating expenses $5,366  
   Fixed operating expenses 3,619 8,985

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

a.$383,919
b.$481,366
c.$387,538
d.$361,770
 
7.A business operated at 100% of capacity during its first month, with the following results:
Sales (116 units)   $649,600
Production costs (145 units):  
   Direct materials $87,777  
   Direct labor 22,411  
   Variable factory overhead 39,220  
   Fixed factory overhead 37,352 186,760
 
Operating expenses:  
   Variable operating expenses $6,117  
   Fixed operating expenses 4,952 11,069

The amount of gross profit that would be reported on the absorption costing income statement is

a.$649,455
b.$494,075
c.$489,123
d.$500,192

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