Answer:
Net operating profit= 102,000
Explanation:
Giving the following information:
Selling price per unit $ 71
Manufacturing costs:
Direct materials $ 12
Direct labor $ 6
Variable manufacturing overhead $ 3
Fixed manufacturing overhead per year $ 264,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 74,000
Year 1
Units in beginning inventory 0
Units produced during the year 11,000
Units sold during the year 8,000
Units in ending inventory 3,000
Year 2
Units in beginning inventory 3,000
Units produced during the year 12,000
Units sold during the year 14,000
Units in ending inventory 1,000
Unitary cost= (12 + 6 + 3) + (264,000/11,000)= $45
Income statement:
Sales= (8,000*$71)= 568,000
COGS= (8,000*45)= 360,000 (-)
Gross profit= 208,000
Variable selling and administrative= (4*8000)= 32,000 (-)
Fixed selling and administrative expense= 74,000 (-)
Net operating profit= 102,000
