Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations, 100,000 units were produced, and 90,000 units were sold.
Manufacturing costs and selling and administrative expenses for the year were as follows:
|
Fixed Costs |
Variable Costs |
|
|
Raw materials |
$1.75 per unit produced |
|
|
Direct labor |
$1.25 per unit produced |
|
|
Factory Overhead |
$100,000 |
$0.50 per unit produced |
|
Selling and administrative |
$70,000 |
$0.60 per unit sold |
What was Indiana Corporation’s net operating income for the year using variable costing?