OPTION: $341000
EXPLANATION:
Particulars | Amount |
---|---|
Sales ($3760000 - 5%) less: variable costs ($1970000 + $10%) |
$3,572,000 ($2,167,000) |
Contribution margin less: fixed costs ($1006000 + $58000) |
$1,405,000 ($1,064,000) |
Operating profit | $341,000 |
Where,
Total variable costs = direct material + direct labor + variable manufacturing overheads + variable selling & administrative overheads
= $526000 + $380000 + $288000 + $776000
= $1970000
total fixed costs = fixed manufacturing overheads + fixed selling & administrative overheads
= $730000 + $276000
= $1006000
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