Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products:
Refer to Anderson Corporation. Based on variable costing, the income before income taxes for the year was
A) $570,600.
B) $560,000.
C) $562,600.
D) $547,500.

Question

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products:
 Refer to Anderson Corporation. Based on variable costing, the income before income taxes for the year was
A) $570,600. 
B) $560,000. 
C) $562,600. 
D) $547,500.

Quizplus · Accepted Answer

Using the variable costing method, the income statement would show a contribution margin of $39 (selling price of $64 minus variable costs of $25) per unit sold. Multiplying this by the 15,000 units sold during the year gives a total contribution margin of $585,000. Subtracting the fixed manufacturing and selling expenses of $22,400 and $81,000, respectively, gives a net operating income of $481,600. Adding non-operating income of $81,000 gives an income before income taxes of $562,600. Therefore, the correct choice is C.

Anderson Corporation Anderson Corporation Has the Following Standard Costs Associated