1. A business operated at 100% of capacity during its first month, with the following results:

Sales (114 units)		$638,400
Production costs (142 units):
Direct materials	$85,961
Direct labor	21,948
Variable factory overhead	38,408
Fixed factory overhead	36,579	182,896
Operating expenses:
Variable operating expenses	$5,576
Fixed operating expenses	4,166	9,742

The amount of operating income that would be reported on the absorption costing income statement is

a. $638,258

b. $511,192

c. $515,358

d. $481,826

2.

Myers Corporation has the following data related to direct materials costs for November: actual costs for 4,650 pounds of material at $5.20 and standard costs for 4,430 pounds of material at $6.00 per pound.

The direct materials quantity variance is

a. $3,720 unfavorable

b. $1,320 unfavorable

c. $3,720 favorable

d. $1,320 favorable