A business operated at 100% of capacity during its first month, with the following results:Sales (104 units) $520,000Production costs (130 units): Direct materials$65,000 Direct labor16,250 Variable factory overhead29,250 Fixed factory overhead26,000136,500Operating expenses: Variable operating expenses$5,650 Fixed operating expenses4,35010,000The amount of operating income that would be reported on the variable costing income statement isa.$395,600b.$425,950c.$510,000d.$519,870

Operating Income:- Operating income is refers to the income, which shows the amount of profit that a…

Answered: A business operated at 100% of capacity…

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 24E: Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual...

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

Sales (104 units)		$520,000
Production costs (130 units):
Direct materials	$65,000
Direct labor	16,250
Variable factory overhead	29,250
Fixed factory overhead	26,000	136,500
Operating expenses:
Variable operating expenses	$5,650
Fixed operating expenses	4,350	10,000

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

a.$395,600

b.$425,950

c.$510,000

d.$519,870

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