Kosco Corporation\'s absorption costing income statement for March follows: Kosc

Question

Kosco Corporation's absorption costing income statement for March follows: Kosco Corporation Income Statement For the Month Ended March 31 Sales (2,400 units).................................................... $48,000 Cost of goods sold: Beginning Inventory (100 units)........................... $ 1,000 Add Cost of Goods Manufactured (2,500 units)... 25,000 Goods Available for Sale ...................................... 26,000 Less Ending Inventory (200 units)........................ 2,000 Cost of Goods Sold .................................................. 24,000 Gross Margin ........................................................... 24,000 Less Selling and Administrative Expenses: Fixed ..................................................................... 7,200 Variable ................................................................. 9,600 16,800 Net Operating Income.............................................. $ 7,200 During March, the company's variable production costs were $8 per unit and its fixed manufacturing overhead totaled $5,000. 7. Net operating income under the variable costing method for March would be: A) $7,200. B) $7,000. C) $7,600. D) $6,800.

Explanation / Answer

sale 48000

cogs (24000)

variable admin exp (9600)

contribution 14400

fixed exp (7200)

net income 7200

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