Souffront Corporation Manufactures and Sells One Product

question 11

Multiple Choice

Souffront Corporation manufactures and sells one product. In the company's first year of operations, the variable cost consisted solely of direct materials of $97 per unit. The annual fixed costs were $1,416,000 of direct labor cost, $3,776,000 of fixed manufacturing overhead expense, and $1,650,000 of fixed selling and administrative expense. 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 59,000 units and sold 55,000 units. The company's only product is sold for $251 per unit. The net operating income for the year under super-variable costing is:

• A) $1,628,000
• B) $1,724,000
• C) $1,240,000
• D) $1,980,000

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Definitions:

Efferent Nerve Fibres

Nerve fibers that conduct signals away from the central nervous system to effector cells and organs, regulating their activity.

Central Nervous System

The primary information-processing center of the body, comprising the brain and spinal cord, responsible for processing and transmitting neural signals.

Endorphins

Natural, pain-relieving chemicals produced by the body that promote a sense of well-being or happiness.

Opiates

Drugs derived from opium that are capable of inducing a state of euphoria, sleep, or pain relief.