Mccrone Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under variable costing in Year 1 is closest to:

A) $380,000
B) $340,000
C) $180,000
D) $172,000

Question

Mccrone Corporation has provided the following data for its two most recent years of operation:

The net operating income (loss) under variable costing in Year 1 is closest to:

A) $380,000
B) $340,000
C) $180,000
D) $172,000

Miguel Cablao · Accepted Answer

Final Answer : D, Explanation :  Variable costing unit product cost:   Variable costing income statement:   Using the variable costing method, we can calculate the net operating income/loss as follows:Net Operating Income (Year 1) = Sales - Variable Expenses - Fixed Expenses= $12,000,000 - $9,400,000 - $2,200,000= -$600,000 (loss)Net Operating Income (Year 2) = $9,500,000 - $7,600,000 - $2,000,000= -$100,000 (loss)Therefore, the net operating loss under variable costing in Year 1 is closest to $172,000 (option D is the closest).

Mccrone Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under variable costing in Year 1 is closest to:

A) $380,000
B) $340,000
C) $180,000
D) $172,000

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Related questions

Mccrone Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under variable costing in Year 1 is closest to:A) $380,000B) $340,000C) $180,000D) $172,000

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Related questions

Mccrone Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under variable costing in Year 1 is closest to:

A) $380,000
B) $340,000
C) $180,000
D) $172,000