Indiana Corporation produces a single product that it sells for $$10$ per unit. During the first year of operations, $104,000$ units were produced and $90,000$ units were sold. Manufacturing costs and selling and administrative expenses for the year were as follows:

Fixed Costs

Variable Costs

Raw materials

$$1\mathrm{.}50$ per unit produced

Direct labour

$$1\mathrm{.}00$ per unit produced

Factory overhead

$$100,000$

$$0\mathrm{.}75$ per unit produced

Selling and administrative

$$50,000$

$$1\mathrm{.}00$ per unit sold

What was Indiana Corporation's operating income for the year using variable costing?

Question $16$Answer

a$.$

$$517,500$

b$.$

$$367,500$

c$.$

$$448,000$

d$.$

$$140,006$