Wet Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year:Direct labor:7,200 hours @ $20 per hr.Production manager salary:$60,000Factory rent:$28,800Equipment maintenance:$12,000 (considered a variable expense)Equipment depreciation:$12,000Production for the year:12,000 unitsTotal Revenue:$1,200,000Total aquariums sold during the period:10,000 unitsOperating Income under absorption costing (after non-production expenses): $244,800Assume that the fixed costs were the same on a per-unit basis during the prior period.What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.)Select one:Oa. $228,000b. $226,000c. $261,600d. $263,592e. None of these options are correct.

Income under variable cost accounting is computed by deducting variable expenses from total revenue…

Direct labor: roduction manager salary: actory rent: quipment maintenance: quipment depreciation: oduction for the year: 7,200 hours @ $20 per hr. $60,000 $28,800 $12,000 (considered a variable expens $12,000 12,000 units tal Revenue: $1,200,000 tal aquariums sold during the period: 10,000 units perating Income under absorption costing (after non-production expenses): $244,800

Direct labor: roduction manager salary: actory rent: quipment maintenance: quipment depreciation: oduction for the year: 7,200 hours @ $20 per hr. $60,000 $28,800 $12,000 (considered a variable expens $12,000 12,000 units tal Revenue: $1,200,000 tal aquariums sold during the period: 10,000 units perating Income under absorption costing (after non-production expenses): $244,800

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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