A Business Operated at 100% of Capacity During Its First

question 73

Multiple Choice

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month, what would be the amount of income from operations reported on the absorption costing income statement?

• A) $50,400
• B) $70,000
• C) $52,000
• D) $68,400

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Definitions:

Reflex

A simple, automatic response to a specific stimulus, such as the knee-jerk reaction.

Problem Solving

The process of identifying a problem, developing possible solution paths, and taking the appropriate course of action.

Behaviorism

A school of psychology that seeks to define psychological research in terms of observable measures emphasizing the scientific study of behavior.

Objectivity

The quality of being unbiased, unprejudiced, and based on observable phenomena and facts.