Krepps Corporation produces a single product. Last year, Krepps manufactured 34,250 units and sold 28,800 units. Production costs for the year were as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales totaled $1,434,200 for the year, variable selling and administrative expenses totaled $167,560, and fixed selling and administrative expenses totaled $215,775. There was no beginning inventory. Assume that direct labor is a variable cost. Under variable costing, the company's net operating income for the year would be: Multiple Choice O $103,550 lower than under absorption costing. O$111150 lower than under absorption costing. O $103,550 higher than under absorption costing. $ 284,275 $140,425 $ 256,875 $ 650,750 $111,150 higher than under absorption costing.
Krepps Corporation produces a single product. Last year, Krepps manufactured 34,250 units and sold 28,800 units. Production costs for the year were as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales totaled $1,434,200 for the year, variable selling and administrative expenses totaled $167,560, and fixed selling and administrative expenses totaled $215,775. There was no beginning inventory. Assume that direct labor is a variable cost. Under variable costing, the company's net operating income for the year would be: Multiple Choice O $103,550 lower than under absorption costing. O$111150 lower than under absorption costing. O $103,550 higher than under absorption costing. $ 284,275 $140,425 $ 256,875 $ 650,750 $111,150 higher than under absorption costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:Krepps Corporation produces a single product. Last year, Krepps manufactured 34,250 units and sold
28,800 units. Production costs for the year were as follows:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Sales totaled $1,434,200 for the year, variable selling and administrative expenses totaled $167,560, and
fixed selling and administrative expenses totaled $215,775. There was no beginning inventory. Assume
that direct labor is a variable cost.
Under variable costing, the company's net operating income for the year would be:
Multiple Choice
O $103,550 lower than under absorption costing.
O $111,150 lower than under absorption costing.
$103,550 higher than under absorption costing.
$ 284,275
$ 140,425
$ 256,875
$ 650,750
$111,150 higher than under absorption costing.
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