Dapple Company incurred the following costs while producing 480 units: direct materials, $11 per unit; direct labor, $29 per unit; variable manufacturing overhead, $13 per unit; total fixed manufacturing overhead costs, $7,680 ; variable selling and administrative costs, $3 per unit; total fixed selling and administrative costs, $4,320. There are no beginning inventories. What is the operating income using absorption costing if 480480 units are sold for $180 each?

Question

Yael Fowler

Business

27 October, 16:53

Dapple Company incurred the following costs while producing 480 units: direct materials, $11 per unit; direct labor, $29 per unit; variable manufacturing overhead, $13 per unit; total fixed manufacturing overhead costs, $7,680 ; variable selling and administrative costs, $3 per unit; total fixed selling and administrative costs, $4,320. There are no beginning inventories. What is the operating income using absorption costing if 480480 units are sold for $180 each?

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Answers (1)

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Brendon Nicholson · Answer 1

Net operating profit = 47,520

Explanation:

Giving the following information:

direct materials, $11 per unit; direct labor, $29 per unit; variable manufacturing overhead, $13 per unit; total fixed manufacturing overhead costs, $7,680 ; variable selling and administrative costs, $3 per unit; total fixed selling and administrative costs, $4,320. There are no beginning inventories.

Income statement:

Sales = 86,400

COGS = (11+29+13) * 480 + 7680 = (33,120)

Gross profit = 53,280

Selling and administrative costs = (3*480) + 4320 = (5,760)

Net operating profit = 47,520