Question

Dawson Company incurred the following costs while producing 200 chairs: Units produced 200 chairs Direct materials $20 per unit Direct labor 25 per unit Variable manufacturing overhead 4 per unit Total fixed manufacturing overhead 3,000 Variable selling and administrative 5 per unit Fixed selling and administrative 4,000 What is operating income using variable costing if 100 units were sold for $250 each?

Answer 1

Answer:

32200 $

Step-by-step explanation:

Dawson company

Direct materials     20

Direct labor            25

Var mfg OH              4

Var s&D OH              5

Total var cost         54 per unit

Selling price          250

Contribution           196

For 200 units contribution = $196*200 =39200$

Less: Fixed costs

Mfg OH = 3000

     S&D     4000                                              7000

Operating income                                          32200 $