€‹Osawa ,​Inc., planned and actually manufactured 230,000 units of its single product in 2017​, its first year of operation. Variable manufacturing cost was $ 21 per unit produced. Variable operating​ (nonmanufacturing) cost was $ 7 per unit sold. Planned and actual fixed manufacturing costs were $ 1,150,000. Planned and actual fixed operating​ (nonmanufacturing) costs totaled $ 440,000. Hartford sold 160,000 units of product at $ 44 per unit.
1. Osawa's 2014 operating income using absorption costing is:
a. $440,000
b. $200,000
c. $600,000
d. $840,000
e. None of these.
2. Osawa's 2014 operating income using variable costing is:
a. $800,000
b. $440,000
c. $200,000
d. S600,000
e. None of these.
Answers: 2
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