Yazzie, Inc The Operating Income Calculated Using Variable Costing and Absorption Costing

Multiple Choice

Yazzie, Inc. reports the following information for the year ended December 31: $$\begin{array} { | l | r | l | } \hline \text { Units sold } & 620 & \text { units } \\\hline \text { Sales price } & \$ 160 & \text { per unit } \\\hline \text { Direct materials } & \$ 26 & \text { per unit } \\\hline \text { Direct labor } & \$ 10 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 13 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 30 & \text { per unit } \\\hline \text { Variable selling and administrative costs } & \$ 5 & \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 14,200 & \text { per year } \\\hline\end{array}$$ The operating income calculated using variable costing and absorption costing amounted to $9300 and $11,400, respectively. There were no beginning inventories. Determine the total fixed manufacturing overhead that will be expensed under variable costing for the year 2016.

A) $20,700
B) $18,600
C) $34,720
D) $30,380