Jarvix Corporation, which has only one product, has provided the following data

Question

Jarvix Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $111 Units in beginning inventory 400 Units produced 8,800 Units sold 8,900 Units in ending inventory 300 Variable costs per unit: Direct materials $34 Direct labor $37 Variable manufacturing overhead $3 Variable selling and administrative $9 Fixed costs: Fixed manufacturing overhead $61,600 Fixed selling and administrative $169,100 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. What is the net operating income for the month under absorption costing? $2,100 $25,900 $18,500 $17,800

Explanation / Answer

Net Operating Income

So correct answer is $ 18,500

Particulars Units Rate Amount Sales 8900 111 987900 Less : Cost of Goods sold Direct Material 8900 34 302600 Direct Labor 8900 37 329300 Manufacturing Overhead Variable 8900 3 26700 Fixed 61600 Gross margin 267700 Less : Selling & Admin Variable 8900 9 80100 Fixed 169100 Net operating Income 18500

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