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

question 347

Multiple Choice

Keyser Corporation, which has only one product, has provided the following data concerning its most recent month of operations: The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.What is the net operating income for the month under absorption costing?

• A) $7,000
• B) $4,600
• C) $11,600
• D) $24,200

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Definitions:

Negative Externalities

Costs incurred by third parties not involved in the transaction or decision-making process, typically resulting from production or consumption activities.

Positive Externalities

Benefits that occur to third parties as a result of an economic activity, which are not accounted for in the market price.

Perfect Knowledge

A theoretical scenario where all consumers and producers have complete and accurate information about prices and products in the market.

Inelastic Demand

When the quantity demanded of a good or service changes very little with a change in price, showing low sensitivity.