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Finding Operating Income

CMA problem. Use this information to answer problems #22 and #23.

Osawa, Inc. planned and actually manufactured 200,000 units of its single product in
2001, its first year in operation. Variable manufacturing costs were $20 per unit
produced. Variable operating costs were $10 per unit sold. Planned and actual
fixed manufacturing costs were $600,000. Planned and actual operating costs
totaled $400,000 in 2001. Osawa sold 120,000 units of product in 2001 at a
selling price of $40 per unit.

Osawa's 2001 operating income using absorption costing is:
a. $440,000
b. $200,000
c. $600,000
d. $840,000
e. None of these

Osawa's 2001 operating income using variable costing is:
a. $800,000
b. $440,000
c. $200,000
d. $600,000
e. None of these

Solution Preview

Hi There,
<br>
<br>Please see the attached Excel spreadsheet.
<br>
<br>Here are a few links for some extra information regarding ...

Solution Summary

This problem reveals how to find operating income

$2.19