Requirement 1. Houston's 2017 operating income using absorption costing is

(a) $880,000,

(b) $700,000,

(c) $1,140,000,

(d) $1,320,000,

or (e) none of these. Show supporting calculations.

Begin by selecting the labels used in the absorption costing calculation of operating income and enter the supporting amounts. Perform the calculations in this step, but select the correct operating income in the next step. (For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.)

planned and actually manufactured 170,000 units of its single product in 2017, its first year of operation. Variable manufacturing cost was $20 per unit produced. Variable operating (nonmanufacturing) cost was $10 per unit sold. Planned and actual fixed manufacturing costs were $510,000. Planned and actual fixed operating (nonmanufacturing) costs totaled

$440,000. Houston sold 110,000 units of product at $45 per unit.

Absorption costing
Revenues
Cost of goods sold:
	Beginning inventory
	Variable manufacturing costs
	Allocated fixed manufacturing costs
	Cost of goods available for sale
	Deduct ending inventory
	Cost of goods sold
Gross margin
Variable operating costs
Fixed operating costs
Operating income