Advanced Company reports the following information for the current year. All beg

Question

Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.

Given Advanced Company's data, and the knowledge that the product is sold for $50 per unit and operating expenses are $200,000, compute the net income under variable costing.

A. $55,000

B. $67,500

C. $80,500

D. $122,500

E. $205,000

Units produced this year 25,000 units Units sold this year 15,000 units Direct materials $9 per unit Direct labor $11 per unit Variable overhead $75,000 in total Fixed overhead $137,500 in total

Explanation / Answer

sales 750000 variable cost Direct materials 135000 Direct labor 165000 Variable overhead 45000 contribution 405000 fixed overhead 137500 operating expenses 200000 net income 67500 option b

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