Columbia Corporation Produces a Single Product

question 353

Multiple Choice

Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: During November, 35,710 units were manufactured and 8,490 units were in beginning inventory. Variable production costs per unit, total fixed manufacturing expenses, and the number of units produced were the same in prior months.Under absorption costing, for November the company would report a:

• A) $73,660 profit
• B) $50,890 profit
• C) $35,710 profit
• D) $50,890 loss

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Definitions:

Net Income

The remaining earnings of a company following the deduction of all expenses and taxes from its total income.

Deferred Revenue

Income received by a company for goods or services yet to be delivered or performed, recorded as a liability on the balance sheet.

Liability

A financial obligation or debt owed by a business or individual to others, which requires settlement in the future.

Asset

Resources owned or controlled by a business, expected to produce future economic benefits.