Use the Following Information for Questions

question 85

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 variable costing for 2019 is

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

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Definitions:

Double-declining-balance

A method of accelerated depreciation where an asset’s book value is reduced at double the rate of its straight-line depreciation.

Salvage Value

The anticipated worth of an asset upon its sale following the conclusion of its useful life.

Useful Life

The estimated period over which a fixed asset is expected to be usable for the purpose it was acquired.

Leasehold Improvements

Enhancements made to a leased property by the lessee, such as additions or modifications, which typically improve the property's value or utility.