Letcher Corporation Manufactures and Sells One Product

question 202

Multiple Choice

Letcher 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 44,700 units and sold 43,200 units. The company's only product is sold for $183 per unit.The company is considering using either super-variable costing or a variable costing system that assigns $21 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

• A) Variable costing net operating income exceeds super-variable costing net operating income by $109,500.
• B) Super-variable costing net operating income exceeds variable costing net operating income by $109,500.
• C) Variable costing net operating income exceeds super-variable costing net operating income by $31,500.
• D) Super-variable costing net operating income exceeds variable costing net operating income by $31,500.

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Definitions:

Murderers

Individuals who unlawfully kill another human being without justification or valid excuse.

Antisocial Personality Disorder

A mental disorder characterized by a long-term pattern of disregard for, or violation of, the rights of others.

Binge Eating Disorder

An eating disorder characterized by recurrent episodes of eating large quantities of food, often quickly and to the point of discomfort.

Dissociative Identity Disorder

A psychological condition characterized by the presence of two or more distinct personality states that control a person's behavior in different circumstances.