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Jimmyhighroller Jimmyhighroller
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A year ago

Krepps Corporation produces a single product. Last year, Krepps manufactured 20,000 units and sold 15,000 units. Production costs for the year were as follows:

Direct materials$170,000
Direct labor$110,000
Variable manufacturing overhead$200,000
Fixed manufacturing overhead$240,000

Sales totaled $825,000 for the year, variable selling and administrative expenses totaled $108,000, and fixed selling and administrative expenses totaled $165,000. There was no beginning inventory. Assume that direct labor is a variable cost.

Under variable costing, the company's net operating income for the year would be:



▸ $101,250 lower than under absorption costing.

▸ $60,000 lower than under absorption costing.

▸ $101,250 higher than under absorption costing.

▸ $60,000 higher than under absorption costing.
Textbook 
Introduction to Managerial Accounting: Brewer Edition: 9e

Introduction to Managerial Accounting: Brewer Edition: 9e


Edition: 9th
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flash33101flash33101
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A year ago
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Jimmyhighroller Author
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