Erie Corporation manufactures a single product that it sells for $35 per unit. The company has the following cost structure: Variable costs per unit: Production$8Selling and administrative$5Fixed costs per year: Production$82,500Selling and administrative$60,000 There were no units in inventory at the beginning of the year. During the year 30,000 units were produced and 25,000 units were sold. The company's net operating income under variable costing would be:

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Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 26E: Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings...

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Erie Corporation manufactures a single product that it sells for $35 per unit. The company has the following cost structure:


Variable costs per unit:
Production	$	8
Selling and administrative	$	5
Fixed costs per year:
Production	$	82,500
Selling and administrative	$	60,000

There were no units in inventory at the beginning of the year. During the year 30,000 units were produced and 25,000 units were sold.

The company's net operating income under variable costing would be:

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