Question
Krepps Corpoation procuces a sngle product. Last year, Krepps manufactured 34,930 units and sold 29,900 units. Production costs for the year were as follows:Direct materials
Krepps Corpoation procuces a sngle product. Last year, Krepps manufactured 34,930 units and sold 29,900 units. Production costs for the year were as follows:Direct materials $265,468Direct labor $171,157Variable manufacturing overhead $300,398Fixed manufacturing overhead $454,090Sales totaled $1,330,550 for the year, variable selling and administrative costs expense total totaled $170,430 and from xed selling and administrative expenses totaled $261,975.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:A. $65,390 higher than under absorption costingB. $31,689 higher than under absorption costingC. $31,689 lower than under absorption costingD. $65,390 lower than under absorption costing
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