Buckbee Corporation Manufactures and Sells One Product

question 38

Multiple Choice

Buckbee Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 37,000 units and sold 32,000 units. The company's only product is sold for $261 per unit.
Assume that the company uses a variable costing system that assigns $17 of direct labor cost to each unit that is produced. The net operating income under this costing system is:

• A) $1,184,000
• B) $229,000
• C) $714,000
• D) $799,000

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