Loring Company Had the Following Data for the Month

question 112

Multiple Choice

Loring Company had the following data for the month:
Fixed overhead is $4,000 per month; it is applied to production based on normal activity of 2,000 units. During the month, 2,000 units were produced. Loring started the month with 300 units in beginning inventory, with unit product cost equal to this month's unit product cost. A total of 2,100 units were sold during the month at price of $14. Selling and administrative expense for the month, all fixed, totaled $3,600.
-Refer to Figure 8-2. What is operating income under absorption costing?

• A) $3,540
• B) $7,980
• C) $11,340
• D) -$540
• E) $3,740

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Definitions:

Disposition Effect

The tendency of investors to sell assets that have increased in value while holding assets that have decreased in value.

Losing Investments

Investments that have decreased in value from the initial purchase price, resulting in financial loss.

Overweighting Effect

An investment strategy where an investor allocates a larger percentage of their portfolio to a particular asset or sector than the benchmark or reference point.

TRIN Statistic

A technical analysis indicator known as the TRading INdex (TRIN), which compares the number of advancing and declining stocks to their respective volume, aiming to gauge overall market sentiment.