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In: Accounting

Krepps Corporation produces a single product. Last year, Krepps manufactured 27,120 units and sold 21,800 units....

Krepps Corporation produces a single product. Last year, Krepps manufactured 27,120 units and sold 21,800 units. Production costs for the year were as follows: Direct materials $ 222,384 Direct labor $ 124,752 Variable manufacturing overhead $ 208,824 Fixed manufacturing overhead $ 461,040 Sales totaled $915,600 for the year, variable selling and administrative expenses totaled $128,620, and fixed selling and administrative expenses totaled $197,976. There was no beginning inventory. Assume that direct labor is a variable cost. Under variable costing, the company's net operating income for the year would be:

Multiple Choice

$32,452 lower than under absorption costing.

$32,452 higher than under absorption costing.

$90,440 lower than under absorption costing.

$90,440 higher than under absorption costing.

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Expert Solution

ekkarill92 answered 2 years ago
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