Letcher Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Variable costs per unit: Direct materials$89Fixed costs per year: Direct labor$616,000Fixed manufacturing overhead$3,472,000Fixed selling and administrative expenses$1,782,000 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 56,000 units and sold 54,000 units. The company's only product is sold for $227 per unit.The company is considering using either super-variable costing or a variable costing system that assigns $11 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. Variable costing net operating income exceeds super-variable costing net operating income by $22,000.
B. Super-variable costing net operating income exceeds variable costing net operating income by $124,000.
C. Variable costing net operating income exceeds super-variable costing net operating income by $124,000.
D. Super-variable costing net operating income exceeds variable costing net operating income by $22,000.
Answer: A
You might also like to view...
The first wave of globalization was brought to an end by
a. the Great Depression. b. the Second World War. c. the First World War. d. the Smoot-Hawley Act.
Select the process type that is mismatched with the corresponding process characteristic.
a. Job shop ? Low equipment flexibility b. Batch ? High product variety c. Continuous ? Very high output volume d. Assembly line ? Low/medium product variety
The group of words because the Federal Reserve must fight counterfeiting represents a(n) ____
A) phrase B) dependent clause C) independent clause
What Major themes that can be addressed in lectures or class discussions
What will be an ideal response?