Question 10

Last year, Fabre Company produced 20,000 units and sold 18,000 units at a price of $12. Costs for last year were as follows:

Direct materials	$25,000
Direct labor	35,000
Variable factory overhead	12,000
Fixed factory overhead	37,000
Variable selling expense	9,000
Fixed selling expense	7,500
Fixed administrative expense	15,500

Fixed factory overhead is applied based on expected production. Last year, Fabre expected to produce 20,000 units. What is operating income for last year under variable costing?

Group of answer choices

$66,350

$111,800

$78,400

$82,200

$91,780