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 $6,320        Fixed operating expenses 4,240 10,560 The amount of contribution margin that would be reported on the variable costing income statement is a.$454,240 b.$458,480 c.$549,440 d.$559,860

Question

4. 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 $6,320  
     Fixed operating expenses 4,240 10,560

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

a.$454,240
b.$458,480
c.$549,440
d.$559,860

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