Question
Harris Corporation produces a single product. Last year, Harris manufactured 29,650 units and sold 24,600 units. Production costs for the year were as follows: Fixed
Harris Corporation produces a single product. Last year, Harris manufactured 29,650 units and sold 24,600 units. Production costs for the year were as follows: Fixed manufacturing overhead $563,350 Variable manufacturing overhead $243,130 Direct labor $145,285 Direct materials $222,375 Sales were $1,070,100, for the year, variable selling and administrative expenses were $140,220, and fixed selling and administrative expenses were $210,515. 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: $95,950 lower than under absorption costing $95,950 higher than under absorption costing $29,795 higher than under absorption costing $29,795 lower than under absorption costing
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