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Erie Corporation manufactures a single product that it sells for $35 per unit. The company has the following cost structure: Variable costs per unit: Production $ 8 Selling and administrative $ 5 Fixed costs per year: Production $ 82,500 Selling and administrative $ 60,000 There were no units in inventory at the beginning of the year. During the year 30,000 units were produced and 25,000 units were sold. The company's net operating income under variable costing would be: $407,500 $421,250 $431,250 $417,500

Erie Corporation manufactures a single product that it sells for $35 per unit. The company has the following cost structure: Variable costs per unit: Production $ 8 Selling and administrative $ 5 Fixed costs per year: Production $ 82,500 Selling and administrative $ 60,000 There were no units in inventory at the beginning of the year. During the year 30,000 units were produced and 25,000 units were sold. The company's net operating income under variable costing would be: $407,500 $421,250 $431,250 $417,500

FINANCIAL ACCOUNTING
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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Erie Corporation manufactures a single product that it sells for $35 per unit. The company has the following cost structure: Variable costs per unit: Production $8 Selling and administrative $ 5 Fixed costs per year: Production $ 82,500 Selling and administrative $ 60,000 There were no units in inventory at the beginning of the year. During the year 30,000 units were produced and 25,000 units were sold. The company's net operating income under variable costing would be: $407,500 $421,250 $431,250 $417,500
Transcribed Image Text:Erie Corporation manufactures a single product that it sells for $35 per unit. The company has the following cost structure: Variable costs per unit: Production $8 Selling and administrative $ 5 Fixed costs per year: Production $ 82,500 Selling and administrative $ 60,000 There were no units in inventory at the beginning of the year. During the year 30,000 units were produced and 25,000 units were sold. The company's net operating income under variable costing would be: $407,500 $421,250 $431,250 $417,500
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