QUESTION 18

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price	$	90
Units in beginning inventory		0
Units produced		3,400
Units sold		3,000
Units in ending inventory		400

Variable costs per unit:
Direct materials	$	21
Direct labor	$	38
Variable manufacturing overhead	$	6
Variable selling and administrative expense	$	4
Fixed costs:
Fixed manufacturing overhead	$	54,400
Fixed selling and administrative expense	$	3,000

What is the net operating income for the month under variable costing?

		$(20,400)
		$5,600
		$12,000
		$6,400