SailFind,Inc What Is the Operating Income Using Variable Costing If 500

question 97

Multiple Choice

SailFind,Inc.has collected the following data.(There are no beginning inventories. ) $$\begin{array} { | l | r |r| } \hline \text { Units produced } & 600 &\text { units } \\\hline \text { Sales price } & \$ 120 &\text { per unit } \\\hline \text { Direct materials } & \$ 10& \text { per unit } \\\hline \text { Direct labor } & \$ 10& \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 7 &\text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 16,400 &\text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 7 &\text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 11,700& \text { per year } \\\hline\end{array}$$ What is the operating income using variable costing if 500 units are sold?

• A)$14,900
• B)$43,000
• C)$48,300
• D)$11,100

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Definitions:

Separately Reportable

Items or activities that must be individually disclosed in financial statements due to their significance or regulatory requirements.

Operating Profit Or Loss Test

A financial measure used to determine a company's profitability from its core business operations, excluding non-operational factors.

Operating Segments

Components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision-maker in deciding how to allocate resources.

Revenue Test

A criterion used to gauge the amount of revenue generated by a company, project, or product, crucial for decision-making and financial analysis.