McCoy Corporation Manufactures a Computer Monitor

question 171

Multiple Choice

McCoy Corporation manufactures a computer monitor. Shown below is McCoy's cost structure: In its first year of operations, McCoy produced 100,000 monitors but only sold 95,000. McCoy's gross margin in this first year was $2,629,600. McCoy's contribution margin in this first year was $2,109,000.
Under absorption costing, what is McCoy's net operating income for its first year?

• A) $266,000
• B) $786,600
• C) $1,261,600
• D) $2,173,600

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Definitions:

Product Line

A group of related products manufactured by a company, characterized by having similar functions or being sold to the same customer groups.

Consolidations

refer to the process of combining two or more legal cases, accounts, or entities into a single entity for efficiency or to facilitate a unified decision-making process.

Obsolete

describes anything that is out of date or no longer in use, often because it has been replaced by newer versions or technologies.

Judicially Decreed

Formally ordered or adjudged by a court.