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A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (5,000 units): Direct materials $70,000 Direct labor 20,000 Variable factory overhead 10,000 Fixed factory overhead 2,000 $102,000 Operating expenses: Variable operating expenses $17,000 Fixed operating expenses 1,000 18,000 If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month, the amount of manufacturing margin that would be reported on the absorption costing income statement is a. $50,000 Ob. $70,000 Oc. $54,000 Od. not reported Strait Co. manufactures office furniture. During the most productive month of the year, 3,200 desks were manufactured at a total cost of $83,500. In the month of lowest production, the company made 1,270 desks at a cost of $62,400. Using the high-low method of cost estimation, total fixed costs are a. $48,524 Ob. $21,100 Oc. $62,400 Od. $83,500 The level of inventory of a manufactured product has increased by 8,318 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $12.00 $5.00 Unit operating expenses of the period 2.00 4.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $74,862 increase Ob. $74,862 decrease c. $41,590 increase Od. $41,590 decrease