Eagle Corporation manufactures a picnic table. Shown below is Eagle\'s cost stru

Question

Eagle Corporation manufactures a picnic table. Shown below is Eagle's cost structure: Variable Cost per table Total Fixed Cost for year Manufacturing cost $152 ea $262,250 Selling and administrative $12 ea $28,323 In its first year of operations, Eagle produced and sold 10,490 tables. The tables sold for $203 each. How would Eagle's variable costing net operating income be affected in its first year if only 9,270 tables were sold instead of 10,490? A) net operating income would have been $107,970 lower B) net operating income would have been $53,580 lower C) net operating income would have been $47,580 lower D) net operating income would have been $31,720 lower

Explanation / Answer

Sales = (10490-9270)*203 = 247660 Variable Cost = (10490-9270)*(152+12) = 200080 Net Difference = 47580 Option C) net operating income would have been $47,580 lower is correct. Please consider the time devoted to make this reply by rating this as 5 star. Thank u in advance. God bless u :)

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