Paparell Corporation manufactures and sells one product. The following informati

Question

Paparell Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Variable costs per unit: Direct materials 80 0035.03Pixed costs per year Direct labor Pixed manufacturing overhead Pixed selling and administrative expenses $1,452,000 $ 800,000 $2,720,000 The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 40,000 units and sold 33,000 units. The company's only product is sold for $240 per unit. The net operating income for the year under super-variable costing is: Multiple Choice $308,000 $(252.000 924,000

Explanation / Answer

Calculate net operating income under super variable costing method :

so answer is a) $308000

Sales (33000*240) 7920000 Less: Variable cost Direct material (2640000) Contribution margin 5280000 Less: Fixed cost Direct labour (800000) Fixed manufacturing overhead (2720000) Fixed selling and administrative expenses (1452000) (4972000) Net operating income 308000

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