Last year, Fabre Company produced 20,000 units and sold 18,000 units at a price of $12. Costs for last year were as follows:
Fixed factory overhead is applied based on expected production. Last year, Fabre expected to produce 20,000 units.
-Refer to Figure 8-1. What is operating income for last year under variable costing?
A) $111,800
B) $91,780
C) $82,200
D) $78,400
E) $66,350

Question

Last year, Fabre Company produced 20,000 units and sold 18,000 units at a price of $12. Costs for last year were as follows:
  Fixed factory overhead is applied based on expected production. Last year, Fabre expected to produce 20,000 units.
-Refer to Figure 8-1. What is operating income for last year under variable costing?
A) $111,800 
B) $91,780 
C) $82,200 
D) $78,400 
E) $66,350

Quizplus · Accepted Answer

Variable costing considers only variable costs for calculating operating income. Without the figure, we assume that the correct choice is based on the given options.

Last Year, Fabre Company Produced 20,000 Units and Sold 18,000