Question

A business operated at 100% of capacity during its first month, with the following results: Sales (109 units) $490,500 Production costs (136 units): Direct materials $66,157 Direct labor 16,891 Variable factory overhead 29,560 Fixed factory overhead 28,152 140,760 Operating expenses: Variable operating expenses $5,601 Fixed operating expenses 3,325 8,926 The amount of gross profit that would be reported on the absorption costing income statement is

Answer 1

Answer:

$377,685

Explanation:

Calculation to determine what The amount of gross profit that would be reported on the absorption costing income statement is

Particulars Amount

Sales $490,500

Less: Cost of goods sold ($112,815)

($140,760*109 units/136 units)

Gross profit $377,685

($490,500-$112,815)

Therefore The amount of gross profit that would be reported on the absorption costing income statement is $377,685