Question

Hadley Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price Units in beginning inventory Units produced Units sold Units in ending inventory ,900 1,800 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead $32,300 Fixed selling and administrative expense $23,400 What is the net operating income for the month under variable costing? Multiple Choice 0 $5,400

Answer 1

Sales (1,800 * $126)		$226,800
(-) Variable cost
... Variable cost of goods sold	$147,600
... Variable selling and administrative expenses ($11 * 1,800)	$19,800	$167,400
Contribution margin		$59,400
(-) Fixed costs
... Fixed manufacturing overhead	$32,300
... Fixed selling and administrative expenses	$23,400	$55,700
Net operating income		$3,700

Variable cost of goods sold

= ($49 + $28 + $5) * 1,800 units

=