Johnston Corporation Manufactures a Single Product That It Sells for $30

question 181

Multiple Choice

Johnston Corporation manufactures a single product that it sells for $30 per unit.The company has the following cost structure: Last year there was no beginning inventory.During the year,20,000 units were produced and 17,000 units were sold. The company's net operating income for the year under variable costing is:

• A)$110,000
• B)$149,000
• C)$161,000
• D)$170,000

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Definitions:

Target Pricing

A pricing strategy where the selling price is determined based on the desired profit margin and the cost to manufacture or buy the product.

Cost-Oriented Pricing

A pricing strategy that determines the selling price based on the cost of the product plus a markup.

Production

The process of creating goods or services, involving tasks such as design, raw material procurement, manufacturing, and quality control.

Consumer Tastes

Preferences and inclinations of consumers in terms of what they like, desire, or find appealing.