Explore BrainMass

Explore BrainMass

    Operating income: Fabre Company

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Last year, Fabre Company produced 20,000 units and sold 18,000 units at a price of $12. Costs for last year were as follows:

    Direct materials 25,000
    Direct labor 35,000
    Variable factory overhead 12,000
    Fixed factory overhead 37,000
    Variable selling expense 9,000
    Fixed selling expense 7,500
    Fixed administrative expense 15,500

    Fixed factory overhead is applied based on expected production. Last year, Fabre expected to produce 20,000 units.

    What is operating income for last year under absorption costing?

    a.$41,000
    b.$67,520
    c.$85,900
    d.$111,300
    e.$45,000

    © BrainMass Inc. brainmass.com June 4, 2020, 2:57 am ad1c9bdddf
    https://brainmass.com/business/accounting/490490

    Solution Preview

    Total Revenue = 18000*12 = $216,000

    Total Period Cost is as follows...

    DM ...

    Solution Summary

    The solution computes Operating income for Fabre Company.

    $2.19

    ADVERTISEMENT