Medbam,Inc What Is the Operating Income Using Absorption Costing? (Round Any

question 115

Multiple Choice

Medbam,Inc.has collected the following data.(There are no beginning inventories.) : $$\begin{array} { | l | r | } \hline \text { Units produced } & 500 \text { units } \\\hline \text { Units sold } & 500 \text { units } \\\hline \text { Sales price } & \$ 170 \text { per unit } \\\hline \text { Direct materials } & \$ 20 \text { per unit } \\\hline \text { Direct labor } & \$ 25 \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 40 \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 14,000 \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 15 \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 15,000 \text { per year } \\\hline\end{array}$$ What is the operating income using absorption costing? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

• A) $28,500
• B) $21,000
• C) $6,000
• D) $13,500

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