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Krepps Corporation produces a single product. Last year, Krepps manufactured 33,110 units and sold 27,600 units. Production costs for the year were as follows: Direct
Krepps Corporation produces a single product. Last year, Krepps manufactured 33,110 units and sold 27,600 units. Production costs for the year were as follows:
Direct materials | $ | 248,325 | |
Direct labor | $ | 175,483 | |
Variable manufacturing overhead | $ | 294,679 | |
Fixed manufacturing overhead | $ | 463,540 | |
Sales totaled $1,242,000 for the year, variable selling and administrative expenses totaled $140,760, and fixed selling and administrative expenses totaled $221,837. 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:
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