Hatfield Corporation, which has only one product, has provided the following data concerning its most recent month of operations:Selling price $123Units in beginning inventory 0Units produced 6,400Units sold 6,100Units in ending inventory 300Variable costs per unit: Direct materials $45 Direct labor $30 Variable manufacturing overhead $1 Variable selling and administrative $8Fixed costs: Fixed manufacturing overhead $140,800Fixed selling and administrative $91,500What is the net operating income for the month under variable costing? a) $12,200b) ($17,200) c) $5,600d) $6,600

Question

Porter Patterson

Business

3 October, 23:19

Hatfield Corporation, which has only one product, has provided the following data concerning its most recent month of operations:Selling price $123Units in beginning inventory 0Units produced 6,400Units sold 6,100Units in ending inventory 300Variable costs per unit: Direct materials $45 Direct labor $30 Variable manufacturing overhead $1 Variable selling and administrative $8Fixed costs: Fixed manufacturing overhead $140,800Fixed selling and administrative $91,500What is the net operating income for the month under variable costing? a) $12,200b) ($17,200) c) $5,600d) $6,600

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Carsen Simon · Answer 1

Instructions are below.

Explanation:

Giving the following information:

Selling price = $123

Units sold = 6,100

Variable costs per unit:

Direct materials $45

Direct labor $30

Variable manufacturing overhead $1

Variable selling and administrative $8

Fixed costs:

Fixed manufacturing overhead $140,800

Fixed selling and administrative $91,500

First, we need to calculate the total variable cost per unit:

Variable cost per unit = 45 + 30 + 1 + 8 = $84

Income statement:

Sales = 6,100*123 = 750,300

Total variable cost = 6,100*84 = (512,400)

Contribution margin = 237,900

Fixed manufacturing overhead = (140,800)

Fixed selling and administrative = (91,500)

Net operating income = 5,600