Question

Eyad & Ndidi Company reported the following monthly data: Units produced 2,000 units Sales price $ 25 per unit Direct materials $ 1 per unit Direct labor $ 2 per unit Variable overhead $ 3 per unit Fixed overhead $ 8,000 in total What is Eyad and Ndidi's net income under variable costing if 980 units are sold and operating expenses are $12,000? Question 10 options: $10,620 ($1,380) ($2,000) $2,700 $6,620

Answer 1

Correct answer------------$10,620

Working

Variable Costing Income Statement
			Working
Sales		$       24,500.00	(980 x 25)
Less: Variable Cost
Direct material	$           980.00		(980 x 1)
Direct labor	$        1,960.00		(980 x 2)
Variable Factory Overheads	$        2,940.00		(980 x 3)
Total variable cost		$         5,880.00
Contribution Margin		$       18,620.00
Fixed costs:
Fixed manufacturing Overheads	$        8,000.00
Total fixed cost		$         8,000.00
Income from operations		$       10,620.00