The net operating income (loss) under variable costing in Year 2 is closest to:

A) $31,000
B) $160,000
C) $200,000
D) $26,000

Variable Costing

An accounting method that only includes variable costs (costs that change with production levels) in the cost of goods sold and calculates fixed costs as period costs.

Net Operating Income

The total revenue from a business's operations minus its operating expenses, excluding taxes and interest.

Operating Loss

A situation where a company's operating expenses exceed its gross profits, indicating a negative profitability from business operations.