Question
Urban Body Products Ltd. manufactures body wash liquid soap. The controller has provided the following information and stated that standard costing is used for manufacturing,
Urban Body Products Ltd. manufactures body wash liquid soap. The controller has provided the following information and stated that standard costing is used for manufacturing, marketing, and administrative costs. January February Beginning inventory 0 3,000 Production 39,500 43,000 Sales 36,500 41,000 Other information: Selling price $10.00 Standard variable manufacturing cost/unit $1.00 Standard variable market/admin. cost/unit $3.00 Standard fixed manufacturing overhead cost/month $88,000 Standard fixed market/admin. cost/month $52,000 Budgeted denominator level per month (output units) 40,000 There were no beginning or ending inventories of materials or work-in-process. 64) What would Urban Body Products Ltd. operating income (loss) be for February using the variable costing approach? A) $(82,000) B) $155,800 C) $102,500 D) $106,000 E) $229,000
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