Docherty,Inc The Operating Income Calculated Using Variable Costing and Absorption Costing

question 274

Multiple Choice

Docherty,Inc.reports the following information for the year ended December 31: $$\begin{array} { | l | r | c | } \hline \text { Units sold } & 640 & \text { units } \\\hline \text { Sales price } & \$ 120 & \text { per unit } \\\hline \text { Direct materials } & \$ 28 & \text { per unit } \\\hline \text { Direct labor } & \$ 9 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 15 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 12 & \text { per unit } \\\hline \text { Variable selling and administrative costs } & \$ 4 & \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 12,700 & \text { per year } \\\hline\end{array}$$ The operating income calculated using variable costing and absorption costing amounted to $9400 and $11,200,respectively.There were no beginning inventories.Determine the total number of units produced during the year.

• A) 640 units
• B) 790 units
• C) 15 units
• D) 150 units

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Definitions:

Sample Size

The total number of instances or replications incorporated in a statistical sampling.

Population Proportion

The fraction or percentage of the population that exhibits a specific attribute or characteristic.

Sampling Distribution

The probability distribution of a given statistic based on a random sample, reflecting how the statistic varies from sample to sample.

Standard Error

An estimate of the standard deviation of the sampling distribution of a statistic, especially of the mean.