Answer:
$340,000
Explanation:
The computation of the net income under variable costing is shown below;
Sales (50000 × $20) $1,000,000
Less: Variable costs of production;
Units produced (70000 × $10) $700,000
Cost of goods available for sale $700,000
Less: Ending inventory (20000 × $10) ($200,000)
Cost of goods sold ($500,000)
Gross contribution margin $500,000
Less: Variable selling expenses (50000 × $3) ($150000)
Contribution margin $350,000
Less: Fixed overhead ($10,000)
Net income $340,000
