Answer:
$702,000
Explanation:
The computation of operating profit is shown below:-
Direct material = $35
Direct labor = $34
Variable manufacturing Overheads = $40
Fixed manufacturing overheads = $27
Product cost in units = Direct material + Direct labor + Variable manufacturing Overheads + Fixed manufacturing overheads
= $35 + $34 + $40 + $27
= $136
Total expenses = 13,000 × $136
= $1,768,000
Sales revenue = 13,000 × $190
= $2,470,000
So total operating profit = Total expenses - Sales revenue
= $1,768,000 - $2,470,000
= $702,000
Therefore, in this method we ignore the variable marketing and administrative cost in the question for determining the operating profit.
