Chapter 21, Problem 1CMA

Data for the last fiscal year for Merlene Company are as follows:

*Denominator level of activity is 750 units for the year

Actual selling and administrative costs equaled the budgeted amount, and there were no work in process inventories at the end of the period. Under the variable costing concept, the amount of operating income earned by Merlene for the year was:

1. a. $21,500.
2. b. $22,500.
3. c. $28,000.
4. d. $31,000.