Krepps Corporation produces a single product. Last year, Krepps manufactured 30,030 units and sold 24,700 units. Production
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Direct materials | $ | 243,243 | |
Direct labor | $ | 126,126 | |
Variable manufacturing overhead | $ | 237,237 | |
Fixed manufacturing overhead | $ | 420,420 | |
Sales totaled $1,272,050 for the year, variable selling and administrative expenses totaled $133,380, and fixed selling and administrative expenses totaled $195,195. There was no beginning inventory. Assume that direct labor is a variable cost.
Under variable costing, the company's net operating income for the year would be:
Multiple Choice
$28,249 lower than under absorption costing.
$28,249 higher than under absorption costing.
$74,620 lower than under absorption costing.
$74,620 higher than under absorption costing.
Related Book For
Finite Mathematics and Its Applications
ISBN: 978-0134768632
12th edition
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
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