Iancu Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the net operating income for the month under variable costing?
A)$27,300
B)$16,200
C)($7,200)
D)$11,100

Question

Iancu Corporation, which has only one product, has provided the following data concerning its most recent month of operations:  What is the net operating income for the month under variable costing?
A)$27,300 
B)$16,200 
C)($7,200) 
D)$11,100

Quizplus · Accepted Answer

Net operating income under variable costing = Contribution margin - Fixed expenses
Contribution margin = Sales - Variable expenses
Contribution margin = ($120,000) - ($66,000 + $21,600) = $32,400
Net operating income = $32,400 - $16,200 = $16,200. So the correct option is (B).

Iancu Corporation, Which Has Only One Product, Has Provided the Following