Alltech Inc What Is the Operating Income Using Absorption Costing If 500

question 60

Multiple Choice

Alltech Inc. has collected the following data. (There are no beginning inventories.) $$\begin{array} { | l | r | l | } \hline \text { Units produced } & 510 & \text { units } \\\hline \text { Sales price } & \$ 120 & \text { per unit } \\\hline \text { Direct materials } & \$ 19 & \text { per unit } \\\hline \text { Direct labor } & \$ 15 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 9 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 16,000 & \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 10 & \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 12,100 & \text { per year } \\\hline\end{array}$$ What is the operating income using absorption costing if 500 units are sold? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

• A) $6600
• B) $5715
• C) $11,171
• D) $19,015

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