Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 168 Units in beginning inventory 0 Units produced 9,650 Units sold 9,250 Units in ending inventory 400 Variable costs per unit: Direct materials $ 32 Direct labor $ 74 Variable manufacturing overhead $ 20 Variable selling and administrative expense $ 24 Fixed costs: Fixed manufacturing overhead $ 144,750 Fixed selling and administrative expense $ 10,200 What is the net operating income (loss) for the month under variable costing

In order to calculate The net operating income for the month under variable costing for Farron Corporation we would have to make the following calculations:

According to the given data:

i) Direct Material=$32

ii) Direct labor=$74

iii) Variable manufacturing overhead= $20

Hence, Variable costing unit product cost (i + ii + iii)= $126

A) Sales ($168 per unit * 9250 units sold)=$1,554,000

B) Less variable expenses:

Variable cost of goods sold

($126 per unit * 9250 units sold)=$1,165,500

Variable selling and administrative

($24 per unit × 9250 units) $222,000 $1,387,500

C) Contribution margin (A – B)=$166,500

D) Less : fixed expenses

Fixed manufacturing overhead= $144,750

Fixed selling and administrative $10,200 $154,950

E) Net operating Income ( C-D)=$11,550

The net operating income for the month under variable costing is $11,550