Question

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 90 Units in beginning inventory Units produced Units sold Units in ending inventory 3,400 3,000 400 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense HAH $ $ 54,400 3,000 What is the net operating income for the month under variable costing? $6,400 $5,600 $(20,400) $12,000

Answer 1

Answer: The correct answer is $5,600 Variable Costing Method Sales ($90 3,000) Less: Variable Expense Variable Cost of Goods Sold ($65 * 3,000) Variable Selling and Administrative Expense ($4 * 3,000) Contribution Margin Less: Fixed Expense: Fixed Manufacturing Overhead Fixed Selling and Administratuve Expense Net Operating Income 270000 195000 207000 12000 63000 54400 3000 57400 5600 Calculation Variable Costing Unit Product Cost Direct Material Variable Costing Unit Product Cost $21 $38+ $6 Direct Labor Variable Manufacturing Overhead Varibale Costing Unit Product Cost $65