To calculate the operating income using variable costing, we first need to determine the total variable costs.
Question:
To calculate the operating income using variable costing, we first need to determine the total variable costs. Total variable costs - Variable cost per unit * Number of units sold Total variable costs = $350 * 100 units Total variable costs = $35,000 Next, we can calculate the contribution margin, which is the difference between the sales revenue and variable costs. Contribution margin - Net sales revenue - Total variable costs Contribution margin = ($500 * 100 units) - $35,000 Contribution margin - $50,000 - $35,000 Contribution margin = $15,000 With the contribution margin, we can calculate the operating income by subtracting the fixed costs from the contribution margin. Operating income = Contribution margin - Fixed costs Operating income = $15,000 - $9,000 Operating income = $6,000 Therefore, the operating income using variable costing is $6,000. Give her answer by responding
Managerial Accounting A Focus on Ethical Decision Making
ISBN: 978-0324663853
5th edition
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins