Sofie Manufacturers produces decorative pillows and sells them at $96 per unit. In the first month of operation, 1,880 units were produced and 1,720 units were sold. Actual fixed costs are the same as the amount budgeted for the month and the per unit administration cost for production is provided below. Other information for the month includes:

       Variable manufacturing costs                     $24.84 per unit

       Variable marketing costs                            $4.48 per unit

       Fixed manufacturing costs                          $13.35 per unit

       Administrative expenses, all fixed              $7.67 per unit

       Ending inventories:

           Direct materials                                           -0-

           WIP                                                              -0-

           Finished goods                                         160 units

What is the operating income of the business in the first month of operation using the absorption costing method?

Answer rating: 100% (QA)

Income statement Under absorption costing Sales 172096 165120 Less Cost of good... View the full answer