Eagle Corporation manufactures a picnic table. Shown below is Eagle\'s cost stru

Question

Eagle Corporation manufactures a picnic table. Shown below is Eagle's cost structure: Variable cost per table Total fixed cost for the year Manufacturing cost $82 $200,260 Selling and administrative $15 $34,162 In its first year of operations, Eagle produced and sold 11,780 tables. The tables sold for $173 each. How would Eagle's variable costing net operating income have been affected in its first year if only 9,990 tables were sold instead of 11,780? net operating income would have been $88,605 lower net operating income would have been $142,040 lower net operating income would have been $132,460 lower net operating income would have been $136,040 lower?

Explanation / Answer

Difference = 660858 - 517978 = 142880

correct option is "B" - net operating income would have been $ 142040 lower

If 9900 Tables are sold If 11780 Tables are sold sales 1712700    [9900*173] 2037940     [11780*173] less:Variable manufacturing cost 811800     [9900*82] 965960     [11780*82] contribution 900900 1071980 less: Fixed manufacturing 200260 200260 Variable selling 148500    [15*9900] 176700     [11780*15] Fixed selling 34162 34162 net income 517978 660858

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