A business operated at 100% of capacity during its first month and incurred the following costs:
Production costs (5,000 units): Direct materials$70,000
Direct labor20,000
Variable factory overhead10,000
Fixed factory overhead 2,000
$102,000
Operating expenses: Variable operating expenses$17,000
Fixed operating expenses 1,000
18,000
?
If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month, the amount of manufacturing margin that would be reported on the absorption costing income statement is
A. $50,000
B. $54,000
C. not reported
D. $70,000
Answer: C
Business
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