Aquamarine Company Has the Following Information for the Month of May

question 105

Multiple Choice

Aquamarine Company has the following information for the month of May of the current year: $\begin{array}{lr}\text { Selling price } & \$ 220 \text { per unit } \\\text { Variable production costs } & \$ 90 \text { per unit produced } \\\text { Variable selling and admin. expenses } & \$ 25 \text { per unit sold } \\\text { Fixed production costs } & \$ 620,000 \\\text { Fixed selling and admin. expenses } & \$ 350,000 \\\text { Units produced } & 12,000 \text { units } \\\text { Units sold } & 11,500 \text { units }\end{array}$
There were no beginning inventories.
Compute Aquamarine's operating income for the month of May using the variable-costing method.

• A)$480,000
• B)$237,500
• C)$387,500
• D)$220,000

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Definitions:

Advanced Economy

A term used to describe countries with a high level of income per capita and industrial development, along with a high Human Development Index (HDI).

Economic Growth

An increase in the capacity of an economy to produce goods and services, compared from one period of time to another.

United Kingdom

A nation with sovereignty positioned to the northwest of mainland Europe, consisting of England, Scotland, Wales, and Northern Ireland.

Real GDP

Gross Domestic Product adjusted for inflation, providing a measure of the value of goods and services produced in a country using constant prices.