Elison Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the net operating income for the month under variable costing?
A) $8,700
B) $5,700
C) $14,400
D) $(12,000)

Question

Elison Corporation, which has only one product, has provided the following data concerning its most recent month of operations:  What is the net operating income for the month under variable costing?
A) $8,700 
B) $5,700 
C) $14,400 
D) $(12,000)

Quizplus · Accepted Answer

Net operating income under variable costing can be calculated as follows:
Sales - Variable expenses = Contribution margin - Fixed expenses = Net operating income
$33,000 - ($8,000 + $9,300 + $4,000) = $11,700 - $6,000 = $5,700. 
Therefore, the net operating income for the month under variable costing is $5,700.

Elison Corporation, Which Has Only One Product, Has Provided the Following