Question: Butteco Corporation has provided the following cost data for last year when 100,000 units were produced and sold:
Raw materials ...................................... $200,000
Direct labor .......................................... 100,000
Manufacturing overhead ....................... 200,000
Selling and administrative expense ......... 150,000
All costs are variable except for $100,000 of manufacturing overhead and $100,000 of selling and administrative expense. There are no beginning or ending inventories. If the selling price is $10 per unit, the net operating income from producing and selling 110,000 units would be:
- $450,000
- $385,000
- $405,000
- $560,000