Sandy Corporation has provided the following cost data for last year when 50,000 units were produced and sold:
All costs are variable except for $100,000 of manufacturing overhead and $100,000 of selling and administrative expense.
If the selling price is $12 per unit, the net operating income from producing and selling 120,000 units would be:

Question

Sandy Corporation has provided the following cost data for last year when 50,000 units were produced and sold:
 All costs are variable except for $100,000 of manufacturing overhead and $100,000 of selling and administrative expense.
If the selling price is $12 per unit, the net operating income from producing and selling 120,000 units would be:

Quizplus · Accepted Answer

Variable Costs = ($200,000 + $100,000 + $100,000 + $50,000) = $450,000 ÷ 50,000 = $9 per unit
Net Operating Income = ($12 x 120,000) - [$200,000 + ($9 x 120,000)] = $160,000

Sandy Corporation Has Provided the Following Cost Data for Last