Indiana Corporation produces a single product that it sells for $9 per unit. Dur
ID: 2339917 • Letter: I
Question
Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations, 100,000 units were produced and 90,000 units were sold. Manufacturing costs and selling and administrative expenses for the year were as follows:
Fixed Costs aable Costs Raw materials Direet labor. Factory overhead Selling and a S1.75 per unit produced S1.25 per unit produced $0.50 per unit produced S0.60 per unit sold S100,000 S70.000 What was Indlana Corporatilon's net operating Income for the year using variable costing? O $181,000 O $271,000 O $281,000 $371,000Explanation / Answer
Answer is B. $271,000
If you have any doubts, you can reach me over comment box. Please rate this answer
Sales ($9*90,000) $ 810,000 Less: Variable cost Raw Materials (90,000*$1.75) $ 157,500 Direct Labour (90,000*$1.25) $ 112,500 Variable Factory overhead (90,000*$0.50) $ 45,000 Variable selling and administrative (90,000*$0.60) $ 54,000 Total variable costs $ 369,000 Contribution margin $ 441,000 Less: Fixed costs Fixed Factory overhead $ 100,000 Fixed Selling and Administrative $ 70,000 Total Fixed costs $ 170,000 Net operating income $ 271,000