Badlands,Inc The Operating Income Calculated Using Variable Costing and Absorption Costing

question 44

Multiple Choice

Badlands,Inc.reports the following information for the year ended December 31: $$\begin{array} { | l | r | r| } \hline \text { Units sold } & 640 &\text { units }\\\hline \text { Sales price } & \$ 120 &\text { per unit } \\\hline \text { Direct materials } & \$ 28 &\text { per unit } \\\hline \text { Direct labor } & \$9 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 15 &\text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 12 &\text { per unit } \\\hline \text { Variable selling and administrative costs } & \$ 4& \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 12,700& \text { per year } \\\hline\end{array}$$ The operating income calculated using variable costing and absorption costing amounted to $9,400 and $11,200,respectively.There were no beginning inventories.Determine the total number of units produced during the year.

• A)640 units
• B)790 units
• C)15 units
• D)150 units

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