Letcher Corporation Manufactures and Sells One Product

question 343

Multiple Choice

Letcher Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 56,000 units and sold 54,000 units. The company's only product is sold for $227 per unit.The company is considering using either super-variable costing or a variable costing system that assigns $11 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

• A) Variable costing net operating income exceeds super-variable costing net operating income by $124,000.
• B) Super-variable costing net operating income exceeds variable costing net operating income by $124,000.
• C) Variable costing net operating income exceeds super-variable costing net operating income by $22,000.
• D) Super-variable costing net operating income exceeds variable costing net operating income by $22,000.

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Definitions:

Rogers's Theory

A psychological theory developed by Carl Rogers, focusing on his concept of the self and the importance of the self-actualizing tendency in forming a healthy, fully functioning person.

Driving Forces

Factors that motivate and influence the direction, intensity, and persistence of behavior or processes.

Developing Potential

The process of nurturing or enhancing individuals' abilities, skills, or talents to reach their highest possible level of performance or achievement.

Freud's Structure

Refers to Freud's model of the human psyche, which is divided into three parts: the id, ego, and superego, each serving different functions and drives.