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.)

Question

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.)

Quizplus · Accepted Answer

Under absorption costing, fixed manufacturing overhead is allocated to each unit produced. The cost per unit is calculated by adding direct materials, direct labor, variable manufacturing overhead, and allocated fixed manufacturing overhead. The operating income is then calculated by subtracting total costs from total sales revenue.

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