Question

Keyser Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price	$	105
Units in beginning inventory		600
Units produced		8,500
Units sold		8,600
Units in ending inventory		500

Variable costs per unit:
Direct materials	$	22
Direct labor	$	39
Variable manufacturing overhead	$	3
Variable selling and administrative expense	$	13
Fixed costs:
Fixed manufacturing overhead	$	68,000
Fixed selling and administrative expense	$	162,100

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 variable costing?

Answer 1