Answer:
Operating Income $32290
Explanation:
<em>The difference between the variable and absorption costing is that the fixed costs are treated as period costs in variable costing and as product costs in absorptioon costing. In variable costing all variable costs are treated as product costs.</em>
Dapple Company
Income Statement
Variable Costing
Sales 430 units* $ 160 $ 68,800
Less
Variable Cost OF Goods Sold ( 23650)
Direct materials, $ 13 per unit * 430 5590
Direct labor, $ 26 per unit *430 11180
Variable Manufacturing
Overhead, $ 16 per unit *430 6880
<u>Less</u>
Variable selling and
<u> Administrative costs, $ 2 per unit *430 (860) </u><u> </u>
Contribution Margin 44290
Less
Total Fixed Manufacturing overhead costs, $ 7, 680;
<u>Total Fixed selling and administrative costs, $ 4,320 </u>
<u>Operating Income $32290 </u>
