Answer:
The correct answer is B.
Explanation:
Giving the following information:
Production in units 3,000
Direct materials cost $7,000
Direct labor cost $10,000
Overhead cost $9,600
Sales commission per unit sold $4
Price per unit sold $29
Fixed selling and administrative expense $7,000
First, we need to calculate the cost of goods sold:
cost of goods sold= direct material + direct labor + overhead
COGS= 7,000 + 10,000 + 9,600= 26,600
We need to make an income statement to determine the net operating income:
Sales= 29*3,000= 87,000
COGS= (26,600)
Gross profit= 60,400
Variable selling cost= (4*3,000)= (12,000)
Fixed selling and administrative expense= (7,000)
Net operating income= 41,400
