EnRG Inc., produces trail mix packaged for sale in convienience stores in the NE section of the US. At the beginning of April 2008, the company has…

Demand for the product is expected to remain constant at 50,000 bags per month. The company plans to produce to demand, 50,000 bags in April, however many of the employees take vacation in June, so the company will make 70,000 bags in May and 30,000 bags in June. The costs for revenue for April, May and June are expected to be:Sales revenue: $6/bagDirect material cost: $0.80/bagDirect manufactoring labor costs: $0.45/bagVariable manufacturing overhead costs: $0.30/bagVariable Selling Costs: $0.15/bagFixed manufactoring overhead costs: $105,000/monthFixed Admin Costs: $35,000/monthSuppose the actual costs, marketing demand, and levels of production for April, May and June are as expected.1. Compute operating income for April, May and June under variable costing

Sales (units)Production (units) April5000050000 May5000070000 AprilSales revenueLess: variable costsDirect materialDirect manufacturing laborVariable manufacturing overheadVariable…

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