A business operated at 100% of capacity during its first month, with the following results: Sales (90 units):   $90,000 Production costs (100 units):       Direct materials $40,000     Direct labor 20,000     Variable factory overhead 2,000     Fixed factory overhead 7,000 69,000 Operating expenses:       Variable operating expenses $8,000     Fixed operating expenses 1,000 9,000 The amount of contribution margin that would be reported on the variable costing income statement is a.$29,700 b.$34,200 c.$26,200 d.$20,200

Question

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

Sales (90 units):   $90,000
Production costs (100 units):    
  Direct materials $40,000  
  Direct labor 20,000  
  Variable factory overhead 2,000  
  Fixed factory overhead 7,000 69,000
Operating expenses:    
  Variable operating expenses $8,000  
  Fixed operating expenses 1,000 9,000

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

a.$29,700
b.$34,200
c.$26,200
d.$20,200

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