White Company manufactures a single product and has the foll
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White Company manufactures a single product and has the following cost structure:
Variable costs per unit:
Direct materials $ 3.50
Direct labor $ 4.75
Variable manufacturing overhead $ 1.25
Variable selling and administrative expense $ 3.00
Fixed costs per month:
Fixed manufacturing overhead $ 107,500
Fixed selling and administrative expense $ 64,500
The company produces 21,500 units each month. Assume beginning inventories are zero, 21,500 units are produced, and 20,200 units are sold in a month. If the unit selling price is $25, what is the net operating income under variable costing for the month? (Round your intermediate calculations to 2 decimal places.)
$60,600
$100,650
$80,500
$87,000
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Solution Summary
White Company manufactures a single product and has the following cost structure:
Variable costs per unit:
Direct materials $ 3.50
Direct labor $ 4.75
Variable manufacturing overhead $ 1.25
Variable selling and administrative expense $ 3.00
Fixed costs per month:
Fixed manufacturing overhead $ 107,500
Fixed selling and administrative expense $ 64,500
The company produces 21,500 units each month. Assume beginning inventories are zero, 21,500 units are produced, and 20,200 units are sold in a month. If the unit selling price is $25, what is the net operating income under variable costing for the month? (Round your intermediate calculations to 2 decimal places.)
$60,600
$100,650
$80,500
$87,000
Solution Preview
20200 units * 25 each = 505000
variable costs of 3.50 + 4.75 + ...
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