Ramon Company Reported the Following Units of Production and Sales

question 33

Multiple Choice

Ramon Company reported the following units of production and sales for June and July 2011: $\begin{array}{lrr}&\text { Units }\\\text { Month } & \text { Froduced } & \text { Sold} \\\text { June 2011 } & 100,000 & 90,000 \\\text { July 2011 } & 100,000 & 105,000\end{array}$ Net income under absorption costing for June was £40,000; net income under variable costing for July was £50,000. Fixed manufacturing costs were £600,000 for each month. How much was net income for July using absorption costing?

• A)£50,000
• B)£20,000
• C)£80,000
• D)£40,000

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Definitions:

Standard Meals

Pre-defined, fixed meals that are regularly available in establishments like restaurants or cafeterias.

Producing

The process of creating goods or services.

Profit

The financial gain obtained when revenue from selling a product or service exceeds the costs of producing it.

HVAC Cooling System

A component of the Heating, Ventilation, and Air Conditioning (HVAC) technology aimed at controlling and reducing indoor temperatures through various cooling methods.