McCoy Corporation Manufactures a Computer Monitor

question 362

Multiple Choice

McCoy Corporation manufactures a computer monitor. Shown below is McCoy's cost structure: In its first year of operations, McCoy produced 100,000 monitors but only sold 95,000. McCoy's gross margin in this first year was $2,629,600. McCoy's contribution margin in this first year was $2,109,000.Under variable costing, what is McCoy's net operating income for its first year?

• A) $266,000
• B) $741,000
• C) $1,261,600
• D) $2,173,600

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Definitions:

Chocolate-Covered Peanuts

A confection made by coating peanuts in chocolate, combining the crunchiness of peanuts with the sweetness of chocolate.

Buyers

Individuals or entities that purchase goods or services in a market.

Price

The sum of money needed to buy a product or service.

Movement Along

Refers to changes in the quantity demanded or supplied of a good in response to price changes, moving along a demand or supply curve.