Elison Corporation, Which Has Only One Product, Has Provided the Following

question 127

Multiple Choice

Elison Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the net operating income for the month under absorption costing?

• A) $8,700
• B) $5,700
• C) $14,400
• D) $(12,000)

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Definitions:

Dual Effects Concept

An accounting principle that recognizes each transaction as having at least two effects on the accounting equation.

Income Statement

A financial statement that reports a company's revenues, expenses, and profits over a specific period.

Accounting Equation

An equation representing the relationship between a company's assets, liabilities, and equity; Assets = Liabilities + Equity.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of the shareholders.