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The Colin Division of Carla Vista Company sells its product for $40 per unit. Variable...

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Accounting

The Colin Division of Carla Vista Company sells its product for $40 per unit. Variable costs per unit include: manufacturing, $13; and selling and administrative, $4. Fixed costs are: $240000 manufacturing overhead, and $56000 selling and administrative. There was no beginning inventory. Expected sales for next year are 40000 units. Joseph Moore, the manager of the Colin Division, is under pressure to improve the performance of the Division. As part of the planning process, he has to decide whether to produce 40000 units or 56000 units next year. What would the net income be under variable costing for each alternative? 40000 units 56000 units

$624000 $683200

$672000 $624000

$624000 $624000

$624000 $860000

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