Tremble Corporation Manufactures and Sells One Product

question 49

Multiple Choice

Tremble 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 49,000 units and sold 45,000 units. The company's only product is sold for $233 per unit.
Assume that the company uses a variable costing system that assigns $11 of direct labor cost to each unit that is produced. The net operating income under this costing system is:

• A) $1,035,000
• B) $691,000
• C) $315,000
• D) $735,000

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Definitions:

Aggregate Planning

A marketing activity that involves developing, maintaining and analyzing broad, long-term operational schedules that facilitate decision-making processes.

Enterprise

describes a large, complex business or organization that engages in commercial, industrial, or professional activities.

Minimizes Profit

A situation or strategy that unintentionally reduces the potential earnings or efficiency of a business operation.

Aggregate Planning

A process by which a company determines optimal levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon.