Time remaining: 1:50:29 Tokless Inc. planned and manufactured 400,000 units of i

Question

Time remaining: 1:50:29 Tokless Inc. planned and manufactured 400,000 units of its single product in 2016, its first year of operations. Variable manufacturing costs were $50 per unit of production. Planned and foxed manufacturing costs were $800,000. Marketing and administrative costs (all fixed) were $600,000 in 2016. Tokless Inc. soid 195,000 units of product in 2016 at $65 per unit Full costing operating income for 2016 is calculated to be: O $1,525,00o O $1,850,000 O$1.935,000 O $2.260,000o O $2750000

Explanation / Answer

Calculate operating income under full costing method :

so answer is c) $1935000

Sales (195000*65) 12675000 Variable manufacturing cost (195000*50) (9750000) Fixed manufacturing cost (800000/400000*195000) (390000) Gross profit 2535000 Less: Fixed Marketing and adminstrative expenses (600000) Operating income 1935000

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