Assume that the company uses an absorption costing system that assigns $16 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced. The net operating income under this costing system is:
A)$1,066,000
B)$856,000
C)$544,000
D)$808,000

Question

Quizplus · Accepted Answer

The net operating income under this costing system is $1,066,000. This is calculated by subtracting the total manufacturing costs ($1,200,000) from the total sales revenue ($2,266,000).

Assume That the Company Uses an Absorption Costing System That