Preston Racquets manufactures tennis racquets. The following data are available for last month.

-Using variable costing, what is the operating income at Preston Racquets for last month?
A) $200,000
B) $80,000
C) $20,000
D) $140,000

Question

Preston Racquets manufactures tennis racquets. The following data are available for last month.
 
-Using variable costing, what is the operating income at Preston Racquets for last month?
A) $200,000 
B) $80,000 
C) $20,000 
D) $140,000

Quizplus · Accepted Answer

Variable costing includes only variable production costs in the cost of goods sold and treats fixed manufacturing overhead as a period cost that is expensed in the period incurred. Without specific numbers from Preston Racquets' financials, it's impossible to calculate the exact operating income. However, the correct answer to this question would depend on applying the principles of variable costing to the provided financial data.

Preston Racquets Manufactures Tennis Racquets