Answer:
Option A,$257,732 is correct
Explanation:
The computation of income from operations requires that the operating expenses(variable operating expenses and fixed operating expenses) be deducted in the current period as against charging a portion to closing inventory as it is obtainable under the absorption costing method:
Direct materials $180,100
Direct labor $238,100
Variable factory overhead $261,800
Total prime costs $680,000
Less closing stock(1900*$680,000/18200) ($70,989)
Costs of good sold $609,011
add:operating expenses:
variable operating expenses $126,500
Fixed operating expenses $49,900
Fixed factory overhead $97,900
Total expenses $883,311
income from operations=sales-total expenses
=$1,141,000-$883,311=$257,689
The $257,689 is closest to option A,$257,732 the difference could be due to rounding error
