The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year.

Selling price per unit	$8.50
Variable manufacturing costs per unit	$1.87
Variable selling and administrative expenses per unit	$4.75
Fixed manufacturing overhead (in total)	$80,000
Fixed selling and administrative expenses (in total)	$85,000
Units produced during the year	520,000
Units sold during year	150,000

Using variable costing, what is the operating income for last year?

$447,000

$117,000

$1,275,000

$282,000

QUESTION 10

KrisKros Company has a contribution margin per unit of $54. If 9000 more items are sold, and fixed expenses remain the same, the net change in operating income will be

		$9054
		-$486,000
		$486,000
		$9000