Reference no: EM132984285

Murie Corporation makes one product and has provided the following information:

Budgeted selling price per unit $ 98 per unit sold

Budgeted unit sales, February 11,000 units

Raw materials requirement per unit of output 5pounds

Raw materials cost $ 3.00 per pound

Direct labor requirement per unit of output 2.5 direct labor-hours

Direct labor wage rate $ 18.00 per direct labor-hour

Predetermined overhead rate (all variable) $ 11.00 per direct labor-hour

Variable selling and administrative expense $ 2.70 per unit sold

Fixed selling and administrative expense $ 80,000 per month

Problem 1: The estimated net operating income (loss) for February is closest to:

Option 1: $85,800

Option 2: $35,500

Option 3: $42,000

Option 4: $5,800