Figure 2-2

question 145

Multiple Choice

Figure 2-2. Lonborg Co.had the following beginning and ending inventory balances for the year ended December 31,2011:
In addition,direct labor costs of $30,000 were incurred,overhead equaled $42,000,materials purchased were $27,000 and selling and administrative costs were $22,000.Lonborg Co.sold 25,000 units of product during the year at a sales price of $5.00 per unit.
Refer to Figure 2-2.What was Lonborg's operating income <loss> for the year?

• A)$18,500
• B)$125,000
• C)$<3,500>
• D)$5,500

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Definitions:

Product Life Cycle

The stages a product goes through from introduction to growth, maturity, and decline in the market.

Niche Segment

A specialized market segment focused on a specific group of consumers with particular interests, needs, or demographic characteristics.

Diehard Consumers

Consumers who are extremely loyal to a brand, product, or service, often in spite of other options or changes in the market.

Late Majority

A segment of consumers in the diffusion of innovation model, who adopt new products or technologies after the average consumer.