A Business Operated at 100% of Capacity During Its First

question 140

Multiple Choice

A business operated at 100% of capacity during its first month and incurred the following costs: If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what is the amount of the manufacturing margin that would be reported on the variable costing income statement?

• A) $104,000
• B) $106,000
• C) $140,000
• D) not reported

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Definitions:

Opportunity Cost

The cost of missing out on the next best alternative when making a decision.

Leisure Time

Time spent not working and free from domestic or professional duties, allowing for rest, recreation, or personal activities.

Unproductive Activity

Unproductive Activity is an economic term that describes actions or work that do not contribute to the production of goods or services or generate economic value.

Productive Activity

Productive activity involves processes or actions that contribute to the production of goods and services, thereby adding economic value.