Assume the following information for a company that produced and sold 10,000 units during its first year of operations: Per Unit Per Year Selling price $ 200 Direct materials $ 82 Direct labor $ 50 Variable manufacturing overhead $ 10 Sales commission $ 8 Fixed manufacturing overhead $ 300,000 Using variable costing, what is the companys net operating income? Multiple Choice $500,000 $180,000 $280,000 $200,000

pt 2

Assume a companys activity-based costing system included three expenses: Vehicle operating expenses, $300,000; Vehicle depreciation, $160,000; and Customer service salaries, $210,000. These costs were consumed by four activities as follows:

	Travel	Deliveries	Customer Service	Other	Total
Vehicle operating expenses	45%	40%	10%	5%	100%
Vehicle depreciation	40%	50%	0%	10%	100%
Customer service salaries	20%	30%	35%	15%	100%

How much of the companys total costs should not be allocated to customers when analyzing customer profitability?

Multiple Choice

• $87,500

• $42,000

• $62,000

• $62,500