Assume that a company produced and sold 10,000 units during its first year of operations. It has also provided the following information:

	Per Unit					Per Year
Selling price		$	240
Direct materials		$	85
Direct labor		$	60
Variable manufacturing overhead		$	10
Sales commission		$	11
Fixed manufacturing overhead						$	?
Fixed selling and administrative expense						$	250,000

If the companys unit product cost under absorption costing is $203, then what is the amount of fixed manufacturing overhead per year?

Multiple Choice

• $370,000

• $480,000

• $230,000

• $580,000

Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units during Year 2, while producing 12,000 units and selling 15,000 units in year 3.

	Per Unit					Per Year
Selling price		$	240
Direct materials		$	85
Direct labor		$	60
Variable manufacturing overhead		$	10
Sales commission		$	11
Fixed manufacturing overhead						$	450,000
Fixed selling and administrative expense						$	250,000

Using variable costing, what is the net operating income for Year 3?

Multiple Choice

• $625,000

• $575,000

• $860,000

• $410,000