Find what is the company operating income

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Question 1: XYZ Inc. sells a single product for $40 per unit. Direct materials costs were $5 per unit, while direct labour and variable manufacturing overhead costs were $3 and $2 respectively. Fixed manufacturing overhead costs amount $20,000 per month. The company has a practical production capacity of 5,000 units per month. Variable selling costs are $2 per unit. Fixed selling costs are $10,000 per month. Last month, the company produced 5,000 units and sold 3,000 units. What is the company's operating income using absorption costing?

Option a) 6000

Option b) 10000

Option c) 2000

Option d) 62000

Reference no: EM132541927

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