Dude company incurred the following cost while producing 610 units: direct mater

Question

Dude company incurred the following cost while producing 610 units: direct materials, $7 per unit; direct labor,$21 per unit; variable manufacturing overhead,$10 per unit; total fixed manufacturing overhead costs, $15,250; variable selling and administrative costs,$3 per unit; total fixed selling and administrative costs,$9,150. There are no beginning inventories.
What is the operating income using variable costing if 430 units are sold for $120 each? Dude company incurred the following cost while producing 610 units: direct materials, $7 per unit; direct labor,$21 per unit; variable manufacturing overhead,$10 per unit; total fixed manufacturing overhead costs, $15,250; variable selling and administrative costs,$3 per unit; total fixed selling and administrative costs,$9,150. There are no beginning inventories.
What is the operating income using variable costing if 430 units are sold for $120 each?
What is the operating income using variable costing if 430 units are sold for $120 each?

Explanation / Answer

Solution :-   Operating income statement (Variable costing method)

Sales

(-) Variable costs

51600 (430 * 120)

17630 (430 * 41Note)

Contribution margin

(-) Fixed costs (15250 + 9150)

33970

24400

Note :- Variable cost per unit = Direct material per unit + Direct labor per unit + Variable manufacturing overhead per unit + Variable selling abd administrative overhead per unit.

= 7 + 21 + 10 + 3

= $ 41.

Conclusion :- Operating income (variable costing method) = $ 9570.

Particulars Amount ($)

Sales

(-) Variable costs

51600 (430 * 120)

17630 (430 * 41Note)

Contribution margin

(-) Fixed costs (15250 + 9150)

33970

24400

Operating income   9570

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.