Question
Krepps Corporation produces a single product. Last year, Krepps manufactured 30,030 units and sold 24,700 units. Production costs for the year were as follows: Direct
Krepps Corporation produces a single product. Last year, Krepps manufactured 30,030 units and sold 24,700 units. Production costs for the year were as follows:
Direct materials | $243,243 |
---|---|
Direct labor | $126,126 |
Variable manufacturing overhead | $237,237 |
Fixed manufacturing overhead | $420,420 |
Sales totaled $1,272,050 for the year, variable selling and administrative expenses totaled $133,380, and fixed selling and administrative expenses totaled $195,195. There was no beginning inventory. Assume that direct labor is a variable cost.
Under absorption costing, the ending inventory for the year would be valued at:
Multiple Choice
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$209,786
-
$243,786
-
$252,286
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$182,286
Keyser Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price | $161 |
---|---|
Units in beginning inventory | 1,300 |
Units produced | 9,200 |
Units sold | 9,300 |
Units in ending inventory | 1,200 |
Variable costs per unit: | |
---|---|
Direct materials | $36 |
Direct labor | $53 |
Variable manufacturing overhead | $17 |
Variable selling and administrative expense | $27 |
Fixed costs: | |
Fixed manufacturing overhead | $73,600 |
Fixed selling and administrative expense | $166,300 |
The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.
What is the net operating income for the month under variable costing?
Multiple Choice
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$31,100
-
$20,500
-
$4,800
-
$19,700
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