A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,800 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead $172,300 228,500 255,000 104,300 $760,100 Operating expenses: Variable operating expenses $128,000 Fixed operating expenses 44,300 172,300 If 1,700 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is O $64,061 Ob 562,124 O $76,206 Od $53,601

A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,800 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead $172,300 228,500 255,000 104,300 $760,100 Operating expenses: Variable operating expenses $128,000 Fixed operating expenses 44,300 172,300 If 1,700 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is O $64,061 Ob 562,124 O $76,206 Od $53,601

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter2: Job Order Costing

Section: Chapter Questions

Problem 14E: The following events took place for Rushmore Biking Inc. during February, the first month of...

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The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: Purchased 480,000 of materials. Used 434,500 of direct materials in production. Incurred 125,000 of direct labor wages. Applied factory overhead at a rate of 40% of direct labor cost. Transferred 578,000 of work in process to finished goods. Sold goods with a cost of 550,000. Revenues earned by selling bikes, 910,000. Incurred 185,000 of selling expenses. Incurred 90,000 of administrative expenses. a. Prepare the income statement for Rushmore Biking for the month ending February 28. b. Determine the inventory balances on February 28, the end of the first month of operations.
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