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  3. last year richmon company produced 10000 units and sold 6000...

Question: last year richmon company produced 10000 units and sold 6000...

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Last year, Richmon Company produced 10,000 units and sold 6,000 units at a price of $20. Costs for last year were as follows:

Direct materials $30,000

Direct labor 38,000

Variable factory overhead 8,000

Fixed factory overhead 40,000

Variable selling expense 5,000

Fixed selling expense 4,900

Fixed administrative expense 11,000

Fixed factory overhead is applied based on expected production. Last year, Richmon expected to produce 10,000 units. What is operating income for last year under absorption costing?

a. $55,000 b. $39,000 c. $29,500 d. $12,430 e. $63,100

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