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le Edit View History Bookmarks Window Help Kyle Ma Acct 1090 V0850 2018WI (A) Test: Week #3 Exam #6 This Question: 1 pt Time Re 2of 14 (13 complete) Dessa, Inc. reports the following information for the year ended December 31 Beginning Finished Goods Inventory Units produced Units sold sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative costs Fixed selling and administrative costs 70 units 450 units 520 units $150 per unit $30 per unit $12 per unit $13 per unit $15,200 per year $4 per unit $14,000 per yoar 0 A. $47,320 OB. $18,120 OC. $7.620 OD, $48,800 Click to select your answer

Solution

CALCULATION OF CLOSING STOCK Opening Stock = 70 Units Add: Production = 450 Units Less: Sales 520 Units Closing Stock 0 Units Caclulation of Unit Cost of Production by using Variable Costing Particulars Amount Cost per Unit Units Total Cost Direct Material $                30.00                        450 $       13,500.00 Direct Labour $                12.00                        450 $          5,400.00 Variable Manufacturing Cost $                13.00                        450 $          5,850.00 Total Manufacturing Variable Cost $       24,750.00 VARIABLE COSTING INCOME STATEMENT Per unit Cost Amount Sales (520 Units X 150 ) $       78,000.00 Less: Variable Cost of Goods Sold Inventory, Beginning $          3,850.00 Add: Vriable Cost of Goods Manufactured $       24,750.00 Total Variable Cost of Goods Sold $       28,600.00 Manufacturing Margin $       49,400.00 Less: Variable Sellign and administration expenses $          2,080.00 (520 units X $ 4 Per unit) Contribution margin $       47,320.00 Fixed Cost Fixed Manufacturing Cost $       15,200.00 Fixed Selling and adminsitration expenses $       14,000.00 Total Fixed Cost $       29,200.00 Income from Oparations $       18,120.00 Answer = Option B = $ 18,120