Croft Corporation Produces a Single Product

question 130

Multiple Choice

Croft Corporation produces a single product. Last year, the company had a net operating income of $160,000 using absorption costing and $149,000 using variable costing. The fixed manufacturing overhead cost was $10 per unit. There were no beginning inventories. If 43,000 units were produced last year, then sales last year were:

• A) 32,000 units
• B) 40,000 units
• C) 41,900 units
• D) 54,000 units

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Definitions:

Dividend Yield

A stock’s annual dividend divided by its current price.

Par Value

The face value of a bond or stock as designated in its charter, distinct from its market value.

After-Tax Basis

Financial calculations or comparisons made after accounting for the impact of taxes.

Cost of Debt

The effective rate that a company pays on its current debt, including interest payments and fees.