Wind Fall, a manufacturer of leaf blowers, began operations this year. During this year, the company produced 10,000 leaf blowers and sold 8,500. At year-end, the company reported the following income statement using absorption costing: Sales (8,500 × $45) Cost of goods sold (8,500 × $20) Gross margin Selling and administrative expenses Net income Production costs per leaf blower total $20, which consists of $16 in variable production costs and $4 in fixed production costs (based on the 10,000 units produced). Fifteen percent of total selling and administrative expenses are variable. Compute net income under variable costing. Multiple Choice $158,500 $246,500 $206,500 $382,500 170,000 $212,500 60,000 $152,500 $237.500
Wind Fall, a manufacturer of leaf blowers, began operations this year. During this year, the company produced 10,000 leaf blowers and sold 8,500. At year-end, the company reported the following income statement using absorption costing: Sales (8,500 × $45) Cost of goods sold (8,500 × $20) Gross margin Selling and administrative expenses Net income Production costs per leaf blower total $20, which consists of $16 in variable production costs and $4 in fixed production costs (based on the 10,000 units produced). Fifteen percent of total selling and administrative expenses are variable. Compute net income under variable costing. Multiple Choice $158,500 $246,500 $206,500 $382,500 170,000 $212,500 60,000 $152,500 $237.500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Wind Fall, a manufacturer of leaf blowers, began operations this year. During this year, the company produced 10,000 leaf blowers and sold
8,500. At year-end, the company reported the following income statement using absorption costing:
Sales (8,500 × $45)
Cost of goods sold (8,500 × $20)
Gross margin
Selling and administrative expenses
Net income
Production costs per leaf blower total $20, which consists of $16 in variable production costs and $4 in fixed production costs (based on the
10,000 units produced). Fifteen percent of total selling and administrative expenses are variable. Compute net income under variable costing.
Multiple Choice
$158,500
$246,500
$206,500
$382,500
170,000
$212,500
60,000
$152,500
$237.500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fce31b907-ccde-4608-9095-702f0fde7fce%2F4d7ed9b8-c2e3-4dfc-93a4-0b77ee39c953%2Fldxld94_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Wind Fall, a manufacturer of leaf blowers, began operations this year. During this year, the company produced 10,000 leaf blowers and sold
8,500. At year-end, the company reported the following income statement using absorption costing:
Sales (8,500 × $45)
Cost of goods sold (8,500 × $20)
Gross margin
Selling and administrative expenses
Net income
Production costs per leaf blower total $20, which consists of $16 in variable production costs and $4 in fixed production costs (based on the
10,000 units produced). Fifteen percent of total selling and administrative expenses are variable. Compute net income under variable costing.
Multiple Choice
$158,500
$246,500
$206,500
$382,500
170,000
$212,500
60,000
$152,500
$237.500
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