Octagonal Company Has the Following Information for 2018 There Were No Beginning Inventories

question 132

Multiple Choice

Octagonal Company has the following information for 2018: $\begin{array}{lr}\text { Selling price } & \$ 150 \text { per unit } \\\text { Variable production costs } & \$ 40 \text { per unit produced } \\\text { Variable selling and admin. expenses } & \$ 16 \text { per unit sold } \\\text { Fixed production costs } & \$ 200,000 \\\text { Fixed selling and admin. expenses } & \$ 140,000 \\\text { Units produced } & 10,000 \text { units } \\\text { Units sold } & 8,000 \text { units }\end{array}$ There were no beginning inventories.
What is the net income for Octagonal using the absorption costing method?

• A)$600,000
• B)$480,000
• C)$1,200,000
• D)$452,000

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Definitions:

Wall Thickness

The measurement from one inner surface to the outermost surface of a structure, often referring to pipes or structural materials.

Maximum Torque Load

The highest amount of torque a system or component can handle before failing or becoming unstable.

Pressure Relief Hole

The grease escape hole in the slip spline assembly of a drive shaft.

Slip Spline Assembly

A mechanism in driveshafts that allows for length variation due to suspension movement, ensuring smooth power transmission.