Farris Company, 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)£14,500
B)£17,400
C)£11,300
D)£2,900

Question

Farris Company, 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)£14,500 
B)£17,400 
C)£11,300 
D)£2,900

Quizplus · Accepted Answer

Variable costing only considers variable costs in determining net operating income. In this case, the only variable cost is the cost of goods sold, which is £2,900. Therefore, the net operating income for the month under variable costing is £14,500 (£17,400 - £2,900).

Farris Company, Which Has Only One Product, Has Provided the Following