Consider two spices, cumin and paprika, to be substitutes, a decrease in the supply of paprika, should cause an increase in the
1 answer:
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Answer: $24,000
Explanation:
Operating income under absorption costing:
= Sales - Cost of goods sold - Selling and admin expenses
Cost of goods sold = Variable production cost + Fixed production cost
= (61 * 1,000 units sold) + (32,000 / 1,500 units produced * 1,000 units sold)
= $82,333
Selling and admin expenses:
= Variable + Fixed
= (6 * 1,000) + 8,000
= $14,000
Operating income = (120 * 1,000) - 82,333 - 14,000
= $23,667
= $24,000
