### Problem StatementGiven Advanced Company's data, and the knowledge that the product is sold for $72 per unit and operating expenses are $310,000, compute the net income under variable costing.### Multiple Choice Options- ○ $317,200- ○ $226,800- ○ $72,000- ○ $165,200- ○ $93,200---### ExplanationTo solve this problem, you need to understand how variable costing works. Under variable costing, only variable production costs are included in product costs, while fixed manufacturing overhead is treated as a period cost and expensed in the period incurred. The net income is calculated by subtracting total variable costs and fixed costs from the total sales revenue. Here's a step-by-step guide:1. **Calculate Total Sales Revenue:** Multiply the selling price per unit by the number of units sold.2. **Determine Total Variable Costs:** Add up all variable costs associated with production and sales.3. **Calculate Contribution Margin:** Subtract total variable costs from total sales revenue.4. **Compute Net Income:** Subtract fixed costs from the contribution margin to find the net income.Use this approach to determine the correct answer from the multiple-choice options provided. ### Required Information*(The following information applies to the questions displayed below.)*Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.- **Units produced this year:** 36,000 units- **Units sold this year:** 21,600 units- **Direct materials:** $20 per unit- **Direct labor:** $22 per unit- **Variable overhead:** $3 per unit- **Fixed overhead:** $180,000 in total---Given Advanced Company’s data, and the knowledge that the product is sold for $72 per unit and operating expenses are $310,000, compute the net income under variable costing.#### Multiple Choice- $317,200- $226,800- $72,000

Unit product cost = $20 + $22 +$3 Unit product cost = $45 Variable Cost of goods sold = 21,600*$45…

Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. Units produced this year Units sold this year Direct materials Direct labor Variable overhead 36,000 units 21,600 units $ 20 per unit 22 per unit 3 per unit Fixed overhead $180,000 in total Given Advanced Company's data, and the knowledge that the product is sold for $72 per unit and operating expenses are $310,000, compute the net income under variable costing. Multiple Choice $317,200 $226,800 $72,000

Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. Units produced this year Units sold this year Direct materials Direct labor Variable overhead 36,000 units 21,600 units $ 20 per unit 22 per unit 3 per unit Fixed overhead $180,000 in total Given Advanced Company's data, and the knowledge that the product is sold for $72 per unit and operating expenses are $310,000, compute the net income under variable costing. Multiple Choice $317,200 $226,800 $72,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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