Dimmick Company produces and sells a single product at $10 per unit. During 2012, the company has produced 100,000 units, 90,000 of which were sold during the year. All ending inventory was in finished goods inventory; there was no inventory on hand at the beginning of the year. The following data relate to the company's production process: Direct materials used in production $200,000 Direct labor 180,000 Variable Manufacturing overhead 150,000 Fixed Manufacturing overhead 80,000 Variable Selling and Administrative 175,000 Fixed Selling and Administrative Calculate the operating income using variable costing. 65,000

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Chapter2: Basic Cost Management Concepts
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Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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Dimmick Company produces and sells a single product at $10 per unit. During 2012, the company
has produced 100,000 units, 90,000 of which were sold during the year. All ending inventory was in
finished goods inventory; there was no inventory on hand at the beginning of the year. The
following data relate to the company's production process:
Direct materials used in production $200,000
Direct labor
180,000
Variable Manufacturing overhead
150,000
Fixed Manufacturing overhead
80,000
Variable Selling and Administrative
175,000
Fixed Selling and Administrative
Calculate the operating income using variable costing.
65,000
Transcribed Image Text:Dimmick Company produces and sells a single product at $10 per unit. During 2012, the company has produced 100,000 units, 90,000 of which were sold during the year. All ending inventory was in finished goods inventory; there was no inventory on hand at the beginning of the year. The following data relate to the company's production process: Direct materials used in production $200,000 Direct labor 180,000 Variable Manufacturing overhead 150,000 Fixed Manufacturing overhead 80,000 Variable Selling and Administrative 175,000 Fixed Selling and Administrative Calculate the operating income using variable costing. 65,000
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