A business operated at 100% of capacity during its first month and incurred the following costs:

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Cost and selling price details for product Z are as follows. $ per unit Direct materials 6.00 Direct labour 7.50 Variable overhead 2.50 Fixed overhead absorption rate 5.00 21.00 Profit 9.00 Selling price 30.00 Budgeted production for the month was 5,000 units although the company managed to produce 5,800 units, selling 5,200 of them and incurring fixed overhead costs of $27,400. 9.4 What is the marginal costing profit for the month? A $45,400 B $46,800 C $53,800 D $72,800

Solution for A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (17,800 units):    Direct…

A business operated at 100% of capacity during its first month and incurred the following costs:

Production costs (17,800 units):   Direct materials$171,000   Direct labor238,600   Variable factory overhead256,400   Fixed factory overhead90,600$756,600 Operating expenses:   Variable operating expenses$131,600   Fixed operating expenses48,200179,800

If 1,600 units remain unsold at the end of the month and sales total $1,190,000 for the month, what would be the amount of income from operations reported on the absorption costing income statement?

a.$313,465b.$59,865c.$68,009d.$321,609

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Solution for A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (17,800 units):    Direct…

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55.A business operated at 100% of capacity during its first month and incurred the following costs:Production costs (10,000 units):Direct materials$170,000Direct labor340,000Variable factory overhead190,000Fixed factory overhead50,000$750,000Operating expenses:Variable operating expenses$ 60,000Fixed operating expenses18,00078,000If 300 units remain unsold at the end of the month, what is the amount of inventory that would be reported onthe variable costing balance sheet?a.$22,500b.$21,000c.$23,040d.$24,300

____56.A business operated at 100% of capacity during its first month and incurred the following costs:Production costs (10,000 units):Direct materials$140,000Direct labor40,000Variable factory overhead20,000Fixed factory overhead4,000$204,000Operating expenses:Variable operating expenses$ 34,000Fixed operating expenses2,00036,000If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what is theamount of the manufacturing margin that would be reported on the variable costing income statement?

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