Stubenrauch Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: 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 38,000 units and sold 32,000 units. The company's only product is sold for $240 per unit.
Assume that the company uses a variable costing system that assigns $14 of direct labor cost to each unit that is produced. The net operating income under this costing system is:
A) $282,000
B) $912,000
C) $1,248,000
D) $828,000

Question

Stubenrauch Corporation manufactures and sells one product. The following information pertains to the company's first year of operations:  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 38,000 units and sold 32,000 units. The company's only product is sold for $240 per unit.
Assume that the company uses a variable costing system that assigns $14 of direct labor cost to each unit that is produced. The net operating income under this costing system is:
A) $282,000 
B) $912,000 
C) $1,248,000 
D) $828,000

Quizplus · Accepted Answer

Variable costing unit product cost:
 11eacbfc_c88e_f2cd_8ffe_5bb495e804f0_TB7552_00 Variable costing income statement:
 11eacbfc_c88e_f2ce_8ffe_6be55a168b92_TB7552_00

Stubenrauch Corporation Manufactures and Sells One Product