Question

Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 120 Units in beginning inventory 0 Units produced 9,050 Units sold 8,650 Units in ending inventory 400 Variable costs per unit: Direct materials $ 20 Direct labor $ 62 Variable manufacturing overhead $ 8 Variable selling and administrative expense $ 12 Fixed costs: Fixed manufacturing overhead $ 135,750 Fixed selling and administrative expense $ 9,000 What is the net operating income (loss) for the month under variable costing

Answer 1

Answer:

$10, 950

Explanation:

What is the net operating income (loss) for the month under the variable costing?

Direct materials   $  20

Direct labour      62

Variable manufacturing overheads  8

Total variable costs    90

Sales ($120 x 8, 650)     $ 1, 038, 000

Variable expenses:

Variable cost of goods sold ($90 x 8650)    778, 500

Variable selling admin costs ($12 x 8, 650)   103, 800

Contribution margin      155, 700

Fixed expenses:

Fixed manufacturing overheads     135, 750

Fixed selling and admin       9, 000

Net operating profit      10, 950