Leeds Electronics, 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)£28,500
B)£25,700
C)£34,400
D)(£12,900)

Question

Leeds Electronics, 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)£28,500 
B)£25,700 
C)£34,400 
D)(£12,900)

Quizplus · Accepted Answer

Variable costing only considers variable costs in the calculation of net operating income. In this case, the variable costs are £15,600. The net operating income is calculated as revenue minus variable costs, which is £44,100 - £15,600 = £28,500.

Leeds Electronics, Which Has Only One Product, Has Provided the Following