Use the Following Information for Items

question 22

Short Answer

Use the following information for items
The Colin Division of Mochrie Company sells its product for $30 per unit.Variable costs per unit are: manufacturing, $12; and selling and administrative, $2.Fixed costs are: $200,000 manufacturing overhead, and $50,000 selling and administrative.There was no beginning inventory.Expected sales for next year are 40,000 units.Ryan Stiles, the manager of the Colin Division, is under pressure to improve the performance of the Division.As he plans for next year, he has to decide whether to produce 40,000 units or 50,000 units.
-What would the net income be under variable costing for each alternative?

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Definitions:

Interruptions

Unscheduled or unexpected disruptions in a process or activity, often affecting productivity or concentration.

Unpaid Bills

Financial obligations that have not been settled by the due date.

Core Values

Fundamental beliefs or guiding principles that dictate behavior and action within an organization.

Zappos

An online retailer known for its customer service, specializing in shoes and clothing.