Question

Wooten & McMahon Enterprises produces a product with the following per-unit costs: Direct materials $13.00 Direct labor 8.80 Manufacturing overhead 16.50 Last year, Wooten & McMahon Enterprises produced and sold 825 units at a sales price of $74.80 each. Total selling and administrative expense was $24,200. What was the total operating income last year? (Note: Round answer to two decimal places.) a.$25,500.50 b.$5,912.50 c.$51,000.00 d.$29,000.75

Answer 1

b.$5,912.50

Step-by-step explanation:

The computation of the operating income is shown below:

= Sales - Direct materials cost - Direct labor cost - Manufacturing overhead cost - Total selling and administrative expense

where,

Sales = Number of units × selling price per unit

= 825 units × $74.80

= $61,710

Direct materials cost = Number of units × Direct materials per unit

= 825 units × $13

= $10,725

Direct labor cost = Number of units × Direct labor per unit

= 825 units × $13

= $7,260

Manufacturing overhead cost = Number of units × Manufacturing overhead per unit

= 825 units × $16.50

= $13,612.50

And, the Total selling and administrative expense is $24,200

Now put these values to the above formula

So, the value would equal to

= $61,710 - $10,725 - $7,260 - $13,612.50 - $24,200

= $5,912.50