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

162. Correct answer b. Merlene’s operating income is $22,500 calculated as follows.

Sales (750 x $200) $150,000

COGS (750 x $90) 67,500

Contribution 82,500

Fixed period costs 15,000

Selling & administrative 45,000

Operating income $ 22,500

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