The following information applies to the questions displayed below.] Oak Mart, a

Question

The following information applies to the questions displayed below.] Oak Mart, a producer of solld oak tables, reports the following data from its current year operations, which is Its second year of buslness. 320 per unit Sales price per unit Units produced this year Units sold this year Units in beginning-year Inventory Beginning Inventory costs 120,000 units 123,000 units 3,000 unlts Variable (3,000 units $135) Fixed (3,000 units × $80) $ 405,000 240,000 Total $ 645,000 Production costs this year Direct materials Direct labor Overhead costs this year 44 per unit 60 per unit Varlable overhead FIxed overhead $3,200,000 $7,200,000 Nonproduction costs this year Variable selling and administrative Fixed selling and administrative $1,350,000 4,000,000

Explanation / Answer

Oak Mart Company

Variable Costing Income Statement

$ $ Sales revenue (123,000 x $ 320) 39,360,000 Less Variable cost of goods sold: Beginning inventory 405,000 Production cost this year ( $ 104 x 120,000 + $ 3,200,000) 15,680,000 Non-production cost this year 1,350,000 17,435,000 Contribution margin 21,925,000 Less fixed costs Production 7,440,000 Selling and administrative 4,000,000 11,440,000 Net operating income 10,485,000

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