Affinity Makes a Single Product, Pool Pumps How Much Is Net Income for the Year Under Full

question 6

Multiple Choice

Affinity makes a single product, pool pumps.Information for 2017 appears below (Assume the same unit costs in all years) : $$\begin{array} { l r } \text { Sales in units } & 5,800 \\\text { Production in units } & 6,200 \\\text { Beginning inventory } & 1,500 \\\text { Variable production cost per unit } & \$ 46.00 \\\text { Variable selling cost per unit } & \$ 6.00 \\\text { Fixed production cost per year } & \$ 31,000 \\\text { Fixed selling and administrative cost per year } & \$ 24,000 \\\text { Selling price per unit } & \$ 75.00\end{array}$$ How much is net income for the year under full costing?

• A)$78,400
• B)$80,400
• C)$87,600
• D)None of these answer choices are correct.

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Definitions:

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from operating revenues, excluding taxes and interest.

EBIT

A financial performance metric that calculates a company's profits before accounting for interest and income tax costs, including all other expenses.

Asset Beta

A measure of the sensitivity of a particular asset's returns to the returns of the overall market, indicating its risk relative to the market.

Equity Beta

A measure of the volatility, or systematic risk, of an individual stock in comparison to the market as a whole.