Use the Following Information for Questions

question 107

Multiple Choice

Use the following information for questions
Nielson Corp. sells its product for $6,600 per unit. Variable costs per unit are: manufacturing, $3,600, and selling and administrative, $75. Fixed costs are: $18,000 manufacturing overhead, and $24,000 selling and administrative. There was no beginning inventory at 1/1/15. Production was 20 units per year in 2018-2020. Sales were 20 units in 2018, 16 units in 2019, and 24 units in 2020.
-Income under absorption costing for 2019 is

• A) $4,800.
• B) $8,400.
• C) $9,600.
• D) $13,200.

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Definitions:

Marginal Costs

The supplementary cost that comes with producing an extra unit of a good or service.

Mass Affordability

The widespread ability of the average consumer to purchase goods and services, often due to lower prices or increased income levels.

Economies of Scale

Enterprises see cost efficiencies due to their operating scale, with the cost for every unit of output generally declining as the scale enlarges.