Writer One Inc Variable Costing Operating Income for 2018 Is Calculated to Be

question 19

Multiple Choice

Writer One Inc. manufactures ball point pens that sell at wholesale for $0.80 per unit. Budgeted production in both 2018 and 2019 was 8,000 units. There was no beginning inventory in 2018. The following data summarized the 2018 and 2019 operations: $\begin{array}{lcc} & 2018 & 2019 \\\text { Units sold } & 6,500 & 9,000 \\\text { Units produced } & 8,000 & 8,000\\\text { Costs: }\\\text { Variable factory overhead per unit } & \$ 0.20 & \$ 0.20 \\\text { Fixed factory overhead } & \$ 1,200& \$ 1,200 \\\text { Variable marketing per unit } & \$ 0.30& \$ 0.30 \\\text { Fixed Selling and Administrative } & \$ 320& \$ 320\end{array}$ Variable costing operating income for 2018 is calculated to be:

• A) $149.
• B) $430.
• C) $655.
• D) $1,030.
• E) $1,180.

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Definitions:

Progressive Tax

A tax system in which the tax rate increases as the taxable amount increases, typically placing a heavier burden on wealthier individuals.

Benefits-Received Principle

A tax theory stating that those who benefit from government services should pay taxes in proportion to the amount of benefits they receive.

Government Expenditures

The total amount spent by the government on goods, services, and public projects.

Households

Economic entities (of one or more persons occupying a housing unit) that provide resources to the economy and use the income received to purchase goods and services that satisfy economic wants.