Andy’s Office Warehouse makes office chairs. The following information was reported for the year ended 2011.
|
Total sales |
$2,300,000 |
|
Direct materials |
$20 per chair |
|
Direct labour |
$25 per chair |
|
Variable overhead |
$18 per chair |
|
Fixed overhead |
$665,000 |
|
Selling and admin. costs |
$124,000 |
|
Total production |
19,000 |
|
Sales |
18,400 |
The operating profit for 2011 using absorption costing would be
$372,800
$351,800
$314,000
$360,800