Question:
Jameson Company, which has only one product, has provided the following data concerning its most recent month of operations:
|
Selling price
|
$80
|
|
Units in beginning inventory
|
600
|
|
Units produced
|
8,400
|
|
Units sold
|
8,600
|
|
Units in ending inventory
|
400
|
|
Variable costs per unit:
|
|
|
Direct materials
|
$24
|
|
Direct labor
|
$33
|
|
Variable manufacturing overhead
|
$3
|
|
Variable selling and administrative
|
$5
|
|
Fixed costs:
|
|
|
Fixed manufacturing overhead
|
$117,600
|
|
Fixed selling and administrative
|
$8,600
|
The company produces the same number of units every month, although the sales in units vary from month to month. The company"s variable costs per unit and total fixed costs have been constant from month to month.
What is the net operating income for the month under absorption costing?
A) $5,600
B) $2,800
C) $14,800
D) $0