Question

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 155 Units in beginning inventory 0 Units produced 7,000 Units sold 6,700 Units in ending inventory 300 Variable costs per unit: Direct materials $ 26 Direct labor $ 56 Variable manufacturing overhead $ 20 Variable selling and administrative expense $ 20 Fixed costs: Fixed manufacturing overhead $ 189,000 Fixed selling and administrative expense $ 28,200

Answer 1

INCOME STATEMENT
Revenue from oeration	1038500
Less: variable cost
direct material	182000
direct labour	392000
Variable manufacturing overhead	140000
Variable selling and administrative expense	134000
Less: fixed cost
Fixed manufacturing overhead	18900
Fixed selling and administrative expense	2800
Operating profit	168800

  

NOTE: Direct material, Diret labour and manufacturing overhead are related to production so all are calculated on the basis of production i.e. 7000 quantity and selling and administration expenses related to sales so calculated on the basis of sales i.e. 6700 qty.