Kern Corporation Produces a Single Product

question 278

Multiple Choice

Kern Corporation produces a single product. Selected information concerning the operations of the company follow: Assume that direct labor is a variable cost.
Under absorption costing, the value of the ending finished goods inventory would be:

• A) $7,200
• B) $7,650
• C) $8,000
• D) $9,700

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Definitions:

Optimal Area

The most advantageous or efficient region or point for a specific activity or condition.

Public Good

A non-excludable and non-rivalrous good that can be consumed by everyone, such as national defense or public parks.

Nonexclusive

A term usually related to goods or services, indicating that they cannot be withheld from individuals who don't pay for them.

Marginal Social Cost

The total cost to society, including both private and external costs, of producing one additional unit of a good or service.