Question

Dawson Company incurred the following costs while producing 200 chairs: Units produced 200 chairs Direct materials $20 per unit Direct labor 25 per unit Variable manufacturing overhead 4 per unit Total fixed manufacturing overhead 3,000 Variable selling and administrative 5 per unit Fixed selling and administrative 4,000 What is operating income using variable costing if 100 units were sold for $250 each?

Answer 1

32200 $

Explanation:

Dawson company

Direct materials 20

Direct labor 25

Var mfg OH 4

Var s&D OH 5

Total var cost 54 per unit

Selling price 250

Contribution 196

For 200 units contribution =
`196*200 =39200`

Less: Fixed costs

Mfg OH = 3000

S&D 4000 7000

Operating income 32200 $