Leheny Corporation Manufactures and Sells One Product

question 30

Multiple Choice

Leheny Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 55,000 units and sold 50,000 units. The company's only product is sold for $238 per unit.
Assume that the company uses an absorption costing system that assigns $21 of direct labor cost and $58 of fixed manufacturing overhead to each unit that is produced. The net operating income under this costing system is:

• A) $580,000
• B) $1,400,000
• C) $1,005,000
• D) $1,110,000

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Definitions:

Depression

Depression is a mental health disorder characterized by persistently depressed mood or loss of interest in activities, causing significant impairment in daily life.

Prescribed

Prescribed involves a recommendation or directive, often regarding medication or treatment, given by a qualified healthcare professional to a patient.

Sensitization

An increased reaction to a stimulus after repeated exposure to it, leading to heightened responsiveness or sensitivity.

Drug Dependence

A condition where an individual feels compelled to continually use a drug due to both physical and psychological dependency, often leading to significant health, social, and economic issues.