Explore BrainMass

Explore BrainMass

    Net Operating Income from Unit Production

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Butteco Corporation has provided the following cost data for last year when 100,000 units were produced and sold:

    Raw materials ...................................... $200,000
    Direct labor .......................................... 100,000
    Manufacturing overhead ....................... 200,000
    Selling and administrative expense ......... 150,000

    All costs are variable except for $100,000 of manufacturing overhead and $100,000 of selling and administrative expense. There are no beginning or ending inventories. If the selling price is $10 per unit, the net operating income from producing and selling 110,000 units would be:
    (Points: 5)
    $450,000
    $385,000
    $405,000
    $560,000

    © BrainMass Inc. brainmass.com June 3, 2020, 7:42 pm ad1c9bdddf
    https://brainmass.com/business/accounting/net-operating-income-unit-production-109405

    Solution Preview

    We divide the costs into fixed and variable
    Variable cost is
    Raw materials ...................................... $200,000
    Direct labor ...

    Solution Summary

    The solution explains how to calculate the net operating income.

    $2.19

    ADVERTISEMENT