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Krepps Corporation produces a single product. Last year, Krepps manufactured 33,100 units and sold 27,800 units. Production costs for the year were as follows: Direct
Krepps Corporation produces a single product. Last year, Krepps manufactured 33,100 units and sold 27,800 units. Production costs for the year were as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $248, 250 $145,640 $274,730 $595,800 Sales totaled $1,320,500 for the year, variable selling and administrative expenses totaled $164,020, and fixed selling and administrative expenses totaled $205,220. 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: Multiple Choice 0 $26,500 lower than under absorption costing. 0 O $26,500 higher than under absorption costing. $95,400 lower than under absorption costing. 0 $95,400 higher than under absorption costing. 0
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