Newton Corporation Entered into the Following Transactions During Its First

question 19

Multiple Choice

Newton Corporation entered into the following transactions during its first year of operations. (Assume all transactions involve cash.) Acquired $2,000 of capital from the owners.Purchased $600 of direct raw materials.Used $400 of these direct raw materials in the production process.Paid production workers $800 cash.Paid $400 for manufacturing overhead.Started and completed 200 units of inventory.Sold 50 units at a price of $12 each.Paid $80 for selling and administrative expenses.The amount of net income for the year was:

• A) $100.
• B) $75.
• C) $50.
• D) $120.

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Definitions:

Diversification

A strategy of expanding into new markets, products, or services to reduce risk and increase opportunities for growth.

Market Penetration

A quantification of the volume of sales or adoption rate of a product or service as compared to the entire theoretical customer base for that item.

Market Penetration

A strategy aimed at increasing a company's market share for an existing product, or promoting a new product, within an existing market.

Product Development

The process of bringing a new product to market, including idea generation, design, development, and marketing.