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Krepps Corporation produces a single product. Last year, Krepps manufactured 27,540 units and sold 22,200 units. Production costs for the year were as follows: Direct
Krepps Corporation produces a single product. Last year, Krepps manufactured 27,540 units and sold 22,200 units. Production costs for the year were as follows:
Direct materials | $ | 214,812 | |
Direct labor | $ | 121,176 | |
Variable manufacturing overhead | $ | 239,598 | |
Fixed manufacturing overhead | $ | 302,940 | |
Sales totaled $1,098,900 for the year, variable selling and administrative expenses totaled $115,440, and fixed selling and administrative expenses totaled $176,256. 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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