Question

Timmer Corporation just started business in January. There were no beginning inventories. During the year, it...

Timmer Corporation just started business in January. There were no beginning inventories. During the year, it manufactured 11,200 units of product and sold 8,300 units. The selling price of each unit was $28. Variable manufacturing costs were $5 per unit, and variable selling and administrative costs were $3 per unit. Fixed manufacturing costs were $33,600 and fixed selling and administrative costs were $7,900.

What would Timmer's net income be for the year using variable costing?

a.$166,000

b.$99,600

c.$124,500

d.$132,400

Business   Accounting   
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Homework Answers

Answer #1
Income Statement
Sales (8300*28)        2,32,400
Less Variable Cost
Variable Manufacturing Cost (8300*$5)        41,500
Variable Selling & Administrative Cost (8300*$3)        24,900            66,400
Contribution        1,66,000
Less: Fixed Cost
Fixed Manufactruing Cost        33,600
Fixed selling expense           7,900            41,500
Net income        1,24,500
Hence , c. 124500 is correct Answer
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