Indiana Corporation produces a single product that it sells for $9 per unit

ECONOMICS

Multiple Choice

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?

A. $281,000

B. $371,000

C. $271,000

D. $181,000

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