UNIT 8 $6,860 ($9,800 X .70) COST OF NEXT 7 UNITS = (8 X $6,860...

164. Correct answer a. Dremmon’s operating income was $21,500 calculated as follows.

Sales (750 x $200) $150,000

COGS [750 x ($90 + $20)] 82,500

Underapplied fixed cost (50 x $20) 1,000

Selling & administrative 45,000

Operating income $ 21,500