To calculate the net operating income (loss) under absorption costing, we need to consider both variable and fixed costs.
First, let's calculate the total manufacturing costs per unit using absorption costing:
Total manufacturing cost per unit = Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead per unit
Total manufacturing cost per unit = $10 + $6 + $5 + ($130,000 / 10,000) = $10 + $6 + $5 + $13 = $34 per unit
Now, we can calculate the total manufacturing cost for all units produced:
Total manufacturing cost for all units produced = Total manufacturing cost per unit × Units produced during the year
Total manufacturing cost for all units produced = $34 × 10,000 = $340,000
Next, let's calculate the total selling and administrative expenses for the year:
Total selling and administrative expenses = Variable selling and administrative expense per unit sold × Units sold during the year + Fixed selling and administrative expense per year
Total selling and administrative expenses = $5 × 9,000 + $63,000 = $45,000 + $63,000 = $108,000
Now, let's calculate the net operating income (loss) under absorption costing:
Net operating income (loss) = Total sales revenue - Total manufacturing cost for all units produced - Total selling and administrative expenses
Net operating income (loss) = ($47 × 9,000) - $340,000 - $108,000
Net operating income (loss) = $423,000 - $340,000 - $108,000
Net operating income (loss) = $423,000 - $448,000
Net operating income (loss) = -$25,000
Therefore, the net operating income (loss) under absorption costing is -$25,000, which is closest to option ($4,000).
