A Business Operated at 100% of Capacity During Its First

question 94

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 manufacturing margin that would be reported on the absorption costing income statement is

• A)$50,000
• B)$54,000
• C)not reported
• D)$70,000

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Definitions:

Treasury Bill

Short-term, government-issued debt securities that mature in one year or less.

Par

The face value of a bond or other security, which is the amount the issuer promises to repay at maturity.

Dollar-Weighted Return

A measure of an investment's return, taking into account the timing and size of cash flows into and out of the investment.

Internal Rate of Return

An estimate of the profitability of potential investments, calculated as the rate of return that sets the net present value of all cash flows (both positive and negative) from the investment equal to zero.