Answer:
$578,500
Explanation:
Sales price per unit = $ 106
Direct materials per unit = $ 51
Direct labor per unit = $14
Variable overhead per unit = $ 10
Fixed overhead per unit = $ 23
Fixed selling costs = $ 49,600
Variable selling costs = $ 166,300
Beginning inventory = 0
Units produced = 106,700
Units sold = 99,300
Under absorption costing,
Unit product cost:
= Direct materials per unit + Direct labor per unit + Variable overhead per unit + Fixed overhead per unit
= $51 + $14 + $10 + $23
= $98
Gross margin:
= Sales - Cost of goods sold
= (99,300 × $106) - (99,300 × $98)
= $10,525,800 - $9,731,400
= $794,400
Total selling and administrative overheads:
= Fixed cost + variable cost
= $49,600 + $166,300
= $215,900
Marin’s operating income:
= Gross margin - Total selling and administrative overheads
= $794,400 - $215,900
= $578,500
