aine 15 Sales.. 15, North company has provided the following data Sales. Sales p

Question

aine 15 Sales.. 15, North company has provided the following data Sales. Sales price. Variable cost.... $25,000 Fixed cost.. 3,000 units $70 per unit S50 per unit A. decrease by $31,875 B. decrease by $15,000 C. increase by $20,625 D. decrease by $3,125 XYZ Corporation has provided the following cost data for last year when 100,000 units were produced and sold 16. 00,000 Raw materials Direct labor Manufacturing overhead. Selling and administrative expense $200,000 $100,000 $200,000 $150,000 All costs are variable except for $100,000 of manufacturing overhead and $100,000 of selling and administrative expense. There are no beginning or ending inventories. If the selling price is $10 per unit, the net operating income from producing and selling 110,000 units would be: A. $450,000 B. $385,000 C. $405,000 D. $560,000

Explanation / Answer

Answer-16:

Calculation of Net Operating income from producing and selling 110,000 units :

Sales Revenue (110000 units * $10)

$        1,100,000

Less: Direct Material Costs (110000 units * ($200000/100000 units)

$         (220,000)

Less: Direct Labor Costs (110000 units * ($100000/100000 units)

$         (110,000)

Less: Variable Manufacturing Overhead Costs (110000 units * ($100000/100000 units)

$         (110,000)

Less: Fixed Manufacturing Overhead Costs

$         (100,000)

Less: Variable Selling and Admn. Costs (110000 units * ($50000/100000 units)

$            (55,000)

Less: Fixed Selling and Admn. Costs

$         (100,000)

Net Operating income from producing and selling 110,000 units =

$            405,000

Answer-16:

Calculation of Net Operating income from producing and selling 110,000 units :

Sales Revenue (110000 units * $10)

$        1,100,000

Less: Direct Material Costs (110000 units * ($200000/100000 units)

$         (220,000)

Less: Direct Labor Costs (110000 units * ($100000/100000 units)

$         (110,000)

Less: Variable Manufacturing Overhead Costs (110000 units * ($100000/100000 units)

$         (110,000)

Less: Fixed Manufacturing Overhead Costs

$         (100,000)

Less: Variable Selling and Admn. Costs (110000 units * ($50000/100000 units)

$            (55,000)

Less: Fixed Selling and Admn. Costs

$         (100,000)

Net Operating income from producing and selling 110,000 units =

$            405,000

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