Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units during Year 2, while producing 12,000 units and selling 15,000 units in year 3.     Per Unit   Per Year   Selling price   $ 240             Direct materials   $ 94             Direct labor   $ 63             Variable manufacturing overhead   $ 10             Sales commission   $ 11             Fixed manufacturing overhead           $ 450,000     Fixed selling and administrative expense           $ 250,000       Using variable costing, what is the net operating income for Year 3?   Multiple Choice   $230,000   $395,000   $680,000   $445,000

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Chapter6: Activity-based, Variable, And Absorption Costing
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Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units during Year 2, while producing 12,000 units and selling 15,000 units in year 3.
 

  Per Unit   Per Year  
Selling price   $ 240            
Direct materials   $ 94            
Direct labor   $ 63            
Variable manufacturing overhead   $ 10            
Sales commission   $ 11            
Fixed manufacturing overhead           $ 450,000    
Fixed selling and administrative expense           $ 250,000    
 


Using variable costing, what is the net operating income for Year 3?

 

Multiple Choice
  •  

    $230,000

  •  

    $395,000

  •  

    $680,000

  •  

    $445,000

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