Ilford 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) $1,200
B) $5,700
C) $6,900
D) $(18,000)

Question

Ilford 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) $1,200 
B) $5,700 
C) $6,900 
D) $(18,000)

Quizplus · Accepted Answer

Net operating income under variable costing can be calculated as follows:
Sales - Variable expenses - Fixed expenses = Net operating income
$25,000 - ($9,000 + $5,500 + $9,400) - $0 = $1,100
Therefore, the net operating income for the month under variable costing is $1,200 (rounded to the nearest dollar). Option A is the correct answer.

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