A Business Operated at 100% of Capacity During Its First

question 69

Multiple Choice

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month, the amount of operating income reported on the absorption costing income statement would be

• A)$50,400
• B)$70,000
• C)$52,000
• D)$68,400

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Definitions:

Resale

The act of selling a product or service that one has purchased to a third party.

Extending Credit

The practice of allowing customers to purchase goods or services on the promise of future payment, based on trust in the customer's ability and willingness to pay.

Procedural Messages

Communications that provide instructions or directions on how to complete tasks or operate machinery or systems.

Writing Instructions

Writing instructions are detailed directions on how to accomplish a specific task, often including steps to follow, materials needed, and desired outcomes.