Marcelin Corporation manufactures and sells one product. The following informati

Question

Marcelin Corporation manufactures and sells one product. The following information pertains to the company’s first year of operations:

The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 44,700 units and sold 43,200 units. The company’s only product is sold for $235 per unit.

The net operating income for the year under super-variable costing is:

Variable costs per unit: Direct materials $ 71 Fixed costs per year: Direct labor $ 849,300 Fixed manufacturing overhead $ 4,023,000 Fixed selling and administrative expenses $ 1,979,200

Explanation / Answer

Calculate net operating income under super variable costing :

Sales (43200*235) 10152000 Less: Variable expenses Direct material (43200*71) (3067200) Contribution margin 7084800 Less; Fixed cost Direct labor (849300) Fixed manufacturing overhead (4023000) Fixed selling and administrative expenses (1979200) Total fixed expense (6851500) Net operating income 233300

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