A manufacturing company that produces a single product has provided the followin

Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

selling price     $140

units in begining inventory     0

units produces                        1,200

units sold                                    800

units in ending inventory        400

Variable cost per unit:

direct materials     $25

direct labors     $41

variable manufacturing overhead     $6

variable selling and administrative   $6

Fixed cost:

fixed manufacturing overhead     $24,000

fixed selling and administrative   $12,000

- What is the net operating income for the month under variable costing?

- make variable costong income statement.

Explanation / Answer

sales $112,000 Variable Manufacturing cost Direct materials $30,000 Direct labors $32,800 Variable manufacturing overhead $2,400 Total Variable manufacturing cost $65,200 Less: Ending Inventory $21,733.33 Variable manufacturing cost of good sold $43,466.67 variable selling and administrative $4,800 Fixed cost: fixed manufacturing overhead $24,000 fixed selling and administrative $12,000 Cost of good sold as per variable costing $84,266.67 Net operating Income as per variable costing $27,733.33

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