1) Consider the following information for Narnia Co.

Selling price per unit $12.00 Variable manufacturing cost per unit $6.50 ariable selling and administrative cost per unit $1.25 Fixed selling and administrative expense $150,000 Beginning inventory last year 0 units Production last year 240,000 units Sales last year 233,500 units Production this year 200,000 units Sales this year 203,000 units Fixed manufacturing cost per unit last year $2.00

1. Given that fixed manufacturing overhead in total has not changed from last year, what is this years net operating income using absorption costing?

a) $225,550 b) $228,150 c) $276,350 d) $306,750

2) Given that total fixed manufacturing overhead has not changed from last year, what is this years net operating income using variable costing?

a) $226,050

b) $232,750

c) $252,250

d) $306,750