Labadie Corporation Manufactures and Sells One Product

question 221

Multiple Choice

Labadie 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 25,000 units and sold 22,000 units. The company's only product is sold for $251 per unit.The company is considering using either super-variable costing or a variable costing system that assigns $23 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) Super-variable costing net operating income exceeds variable costing net operating income by $69,000.
• B) Variable costing net operating income exceeds super-variable costing net operating income by $69,000.
• C) Super-variable costing net operating income exceeds variable costing net operating income by $192,000.
• D) Variable costing net operating income exceeds super-variable costing net operating income by $192,000.

---

Definitions:

Rule of Three

A writing principle that suggests things that come in threes are inherently funnier, more satisfying, or more effective than other numbers of things.

Daughters of the American Revolution

A lineage-based membership organization for women who are directly descended from a person involved in the United States' efforts towards independence.

Black Singer

A vocalist of African descent known for their contributions to various music genres and for often playing a role in the cultural and civil rights movements.

Supreme Court

The highest judicial body in a country, typically having ultimate appellate jurisdiction over all other courts.