The HF Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year. Using variable costing, what is the operating income for last year?

Question

The HF Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year.  Using variable costing, what is the operating income for last year?

Quizplus · Accepted Answer

Using variable costing, the operating income can be calculated as:
Sales - Variable Expenses - Fixed Expenses
= $6,000,000 - ($2,700,000 + $1,200,000) - $1,000,000
= $103,000
Therefore, the correct answer is B) $103,000.

The HF Corporation Manufactures and Sells Toy Gyroscopes