Reference no: EM132520429

Red and White Company reported the following monthly data:

Units produced               3,600 units

Sales price                   $41 per unit

Direct materials             $7 per unit

Direct labor                  $5 per unit

Variable overhead          $8 per unit

Fixed overhead            $9,000 in total

Question 1: What is Red and White's net income under variable costing if 1,140 units are sold and operating expenses are $16,200?

Option 1: $14,940

Option 2: ($1,260)

Option 3: $4,890

Option 4: ($3,600)

Option 5: $7,740