Eastwood Company Has the Following Information for 2011 There Were No Beginning Inventories

question 36

Multiple Choice

Eastwood Company has the following information for 2011: $\begin{array}{lr}\text { Selling price } & £ 150 \text { per unit } \\\text { Variable production costs } & £ 40 \text { per unit produced } \\\text { Variable selling and admin. expenses } & £ 16 \text { per unit sold } \\\text { Fixed production costs } & £ 200,000 \\\text { Fixed selling and admin. expenses } & £ 140,000 \\\text { Units produced } & 10,000 \text { units } \\\text { Units sold } & 8,000 \text { units }\end{array}$ There were no beginning inventories. What is the net income for Eastwood using the absorption costing method?

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

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Definitions:

Sales Promotion

Marketing strategies aimed at increasing sales in the short term through incentives such as discounts, coupons, or special offers.

Nonpersonal Communication

Refers to messages broadcasted to the general public through various media channels without personalized targeting.

Informative

Pertaining to or providing information; educational or enlightening.

Advertising

The activity of producing and placing promotional materials in various media channels to communicate to the public about products, services, or brands.