Pecan Co. produced and sold units last year. Per unit revenue and costs were as shown in the table.

Revenue $100.00

Cost of Goods Sold:

Direct Materials $15.00

Direct Labour 30.00

Variable Manufacturing Overhead 20.00

Fixed Manufacturing Overhead 10.00

Total Cost of Goods Sold 75.00

Gross Margin $25.00

Selling and Administrative Costs:

Sales Commissions (10% of Sales) $10.00

Administrative Salaries 20.00

Total Selling and Administrative 30.00

Operating Income (Loss) ($5.00)

Fixed manufacturing overhead and administrative salaries are fixed costs. The per unit amounts are based on last year's production.Calculate last year's operating income when the company produced and sold

40,000 units. Round to the nearest dollar.

Question content area top

Part 1

Pecan Co. produced and sold

40,000

units last year. Per unit revenue and costs were as shown in the table.

LOADING...

(Click the icon to view the table.)

Fixed manufacturing overhead and administrative salaries are fixed costs. The per unit amounts are based on last year's production.

Calculate last year's operating income when the company produced and sold

40,000 units. Round to the nearest dollar. Please explain the answer or show the computation. Thank you

A.$(500,000)

B.$(800,000)

C.$0

D.$(200,000)

E. $ (1,000,000)