The selected answer is not my answer. I just had to select one. Dunn Company inc

Question

The selected answer is not my answer. I just had to select one.

Dunn Company incurred the following costs while producing 400 units: direct materials, $6 per unit, direct labor, $22 per unit, variable manufacturing overhead, $19 per unit, total fixed manufacturing overhead costs, $4,000, variable selling and administrative costs, $12 per unit, total fixed selling and administrative costs, $3,200. There are no beginning inventories. What is the operating income using absorption costing if 400 units are sold for $120 each? A. $14,150 OB, $21,350 O C. $14,650 D. $17,200

Explanation / Answer

Calculate absorption costing net income :

so answer is d) $17,200

Sales (400*120) 48000 Less: Cost of goods sold (6+22+19*400+4000) (22800) Gross profit 25200 Less: Selling and administrative expenses (400*12+3200) (8000) Net operating income 17200

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