The net operating income for the year under super-variable costing is:
A)$1,291,000
B)$1,193,000
C)$542,000
D)$1,739,000

Question

Quizplus · Accepted Answer

Super-variable costing includes only variable manufacturing costs in product costs, which are direct materials, direct labor, and variable overhead. Thus, the calculation of net operating income would be:
Sales Revenue - Variable Manufacturing Costs - Fixed Costs = Net Operating Income
$6,345,000 - ($2,834,000 + $2,318,000) - $300,000 = $1,193,000
Therefore, the answer is B.

The Net Operating Income for the Year Under Super-Variable Costing