Calculation of change in net operating income

Reference no: EM13824263

Problem-

Eagle Corporation manufactures a picnic table. Shown below is Eagle's cost structure:

	Variable cost per table	Total fixed cost for the year
Manufacturing cost	$82	$200,260
Selling and administrative	$15	$34,162

In its first year of operations, Eagle produced and sold 11,780 tables. The tables sold for $173 each. How would Eagle's absorption costing net operating income be affected in its first year if 14,240 tables were produced instead of 11,780 and Eagle still sold 11,780 tables?

a. net operating income would have been $39,133 higher

b. net operating income would have been $123,633 lower

c. net operating income would have been $34,633 higher

d. net operating income would not have been affected

Additional Requirement

The problem belongs to Basic Accounting and it discusses on calculation of change in net operating income.

Reference no: EM13824263

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