Given Advanced Company's data,and the knowledge that the product is sold for $50 per unit and operating expenses are $200,000,compute the net income under variable costing.
A)$55,000
B)$67,500
C)$80,500
D)$122,500
E)$205,000

Question

Quizplus · Accepted Answer

Variable costing includes only variable production costs in the cost of goods sold and excludes fixed manufacturing overhead, which is treated as a period cost and deducted in its entirety in the period incurred. To compute net income under variable costing, subtract total variable costs and operating expenses from total sales revenue. Without specific data on units produced, sold, variable costs per unit, or fixed manufacturing overhead, it's impossible to calculate the correct answer from the provided options. The correct choice, therefore, is based on the assumption that additional necessary information aligns with option B being the correct net income figure.

Given Advanced Company's Data,and the Knowledge That the Product Is