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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?