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

question 242

Multiple Choice

Farris 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) $38,850
• B) $11,550
• C) $17,550
• D) $6,000

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Definitions:

Annual Amortization Expense

The portion of the cost of an intangible asset that is expensed through an organization's income statement each year over the asset's useful life.

Consolidated Tax Return

A tax return that combines the tax liability of all subsidiary companies with that of a parent company, treating them as one entity for tax purposes.

Domestic Subsidiaries

Subsidiaries located in the same country as the parent company, operating under the laws and regulations of that country.

Foreign Subsidiaries

Companies that are owned or controlled by another corporation (the parent company) and are located in a country different from where the parent company operates.