Hadlock 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)$15,200
B)$4,000
C)$(9,200)
D)$19,200

Question

Hadlock 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)$15,200 
B)$4,000 
C)$(9,200) 
D)$19,200

Quizplus · Accepted Answer

Under variable costing, the net operating income is calculated as the contribution margin minus fixed costs. 
Contribution margin = Sales revenue - Variable costs = $60,000 - $30,000 = $30,000 
Fixed costs = $14,800 
Net operating income = Contribution margin - Fixed costs = $30,000 - $14,800 = $15,200

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