200 points Farron Corporation which has only one product has

2.00 points Farron Corporation, which has only one product, has provided the following data concerning its most recent month of operations Selling price Units In beginning Inventory Units produced Units sold Units in ending Inver Variable costs per unit $100 0 8,800 8,400 400 Direct materials Direct labor Variable manufacturing overhead Varlable selling and administrative Fixed costs $15 $57 $3 $7 Fixed manuf $132,000 FIxed selling and administrative$8,500 What is the net operating income for the month under variable costing? O $10700 O $(19,300) O $16.700 O 56000

Solution

Calculate net operating income under variable costing :

So answer is a) $10700

Sales (8400*100)	840000
Less: Variable manufacturing cost (15+57+3)*8400	-630000
Less: Variable selling and administrative (8400*7)	-58800
Contribution margin	151200
Fixed manufacturing overhead	-132000
Less: Fixed selling and administrative expense	-8500
Net operating income	10700