The net income by using the method of variable costing is $106,250.
<h3>
What is variable costing?</h3>
A variable costing is one of the costing approaches to determine the net income or net loss by considering the cost of the product is variable.
Given values for step 1:
Direct material cost per unit: $13
Direct labor cost per unit: $15
Variable overhead cost per unit: $3
Variable selling and admin cost per unit: $2
<u>Step-1 </u>Computation of product cost per unit in variable costing:
Given values for step 2:
Product cost per unit: $33
Fixed cost: $118,750
Production units: 25,000
Sales units: 17,500
Computation of net income using variable costing:
A) Sales revenue (17,500 X $60) = $1,050,000
B) Variable Cost (25,000 X $33) = $ (825,000)
C) Contribution margin (A) - (B) = $225,000
D) Fixed cost: = $ (118,750)
E) Net Income (C) - (D) = $106,250
Therefore, by using the variable costing method, the amount of net income comes out to be $106,250.
Learn more about the variable costing in the related link:
brainly.com/question/15579189
#SPJ1