Determining the super-variable costing

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Wahler Corporation manufactures and sells one product. In the company's first year of operations, the variable cost consisted solely of direct materials of $85 per unit. The annual fixed costs were $640,000 of direct labor cost, $2,208,000 of fixed manufacturing overhead expense, and $1,140,000 of fixed selling and administrative expense. The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 32,000 units and sold 30,000 units. The company's only product is sold for $249 per unit.

The net operating income for the year under super-variable costing is:

  • $1,110,000
  • $932,000
  • $972,000
  • $762,000

Reference no: EM131797074

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