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XYZ Inc. sells a single product for $20 per unit. Direct materials costs were $5...

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Accounting

XYZ Inc. sells a single product for $20 per unit. Direct materials costs were $5 per unit, while direct labour and variable overhead costs were $3 and $2 respectively. Fixed overhead costs amount $20,000 per month. The company has a practical production capacity of 5,000 units per month. Variable selling costs are $2 per unit. Fixed selling costs are $5,000 per month. Last month, the company produced 5,000 units and sold 4,000 units. What is the company's operating income using variable costing?

Multiple Choice $6,000 $10,000 $7,000 $14,000

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