Reference: Ref 17-3 (Table: Excellence Publishing) Refer to the Table

question 74

Multiple Choice

Reference: Ref 17-3 (Table: Excellence Publishing) Refer to the table. Each edited book sells for $50. How many people will the company hire per year as editing staff if the annual salary is $47,000 per staff member?

• A) 5
• B) 6
• C) 7
• D) 8

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Definitions:

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in unit product costs.

Net Operating Income

The profit generated from a company's regular business operations, excluding deductions for interest and taxes.

Variable Costing

A costing method where only variable production costs are assigned to inventory and all fixed overhead costs are expensed in the period they are incurred.

Variable Production Costs

Costs that vary directly with the volume of production, including direct labor and materials.