Answer:
$29,200
Explanation:
Computation of the operating income using absorption costing
Operating income using absorption costing
Sales Revenue $64,000
($160×400 units)
Less :Cost of Goods Sold ($26,800)
[($57×400 Units)+$4,000]
Gross Profit $37,200
Less:Selling and Administrative Costs ($8,000)
($12×400 units)+$3,200
$4,800+$3,200=$8,000
Operating Income$29,200
($37,200-$8,000)
Calculation for Cost of goods sold
Direct materials, $9 per unit
Direct labor $30per unit
Variable manufacturing overhead $18 per unit
Total =$57
Therefore the operating income using absorption costing will be $29,200
