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

question 228

Multiple Choice

Alltech Inc.has collected the following data.(There are no beginning inventories.) $$\begin{array} { | l | r | c | } \hline \text { Units produced } & 510 & \text { units } \\\hline \text { Sales price } & \$ 150 & \text { per unit } \\\hline \text { Direct materials } & \$ 16 & \text { per unit } \\\hline \text { Direct labor } & \$ 10 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 10 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 16,000 & \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 9 & \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 10,500 & \text { per year } \\\hline\end{array}$$ 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) $27,500
• B) $26,315
• C) $31,641
• D) $38,315

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