httpswwwmathxlcomStudentPlayerTestaspxtestid18427 ACCT 20542

?https://www.mathxl.com/Student/PlayerTest.aspx?testid=18427 ACCT 20542 CRN #14292 Test: Exam II (Chapter 20, 21, 25) This Question: 1 pt Zertrax, Inc. reports the following information for July: Sales Revenue Variable Costs Operating Income $970,000 120,000 470,000 What is the total fixed cost using variable costing? OA. $850,000 OB, $380,000 O C. $350,000 O D. $590,000

Solution

Under Variable Costing, Operating Income = Contribution Margin– Fixed Costs

Contribution Margin = Sales Revenue – Variable Costs

= $970,000 – 120,000

= $850,000

Operating Income = Contribution Margin– Fixed Costs

$470,000 = $850,000 – Fixed Costs

Therefore, Fixed Costs = $850,000 – 470,000

Fixed Costs = $380,000

Total Fixed Costs using Variable Costing = $380,000

Hence The Answer is “B. $380,000 “