A Business Operated at 100% of Capacity During Its First

question 152

Multiple Choice

A business operated at 100% of capacity during its first month, with the following results: What is the amount of the income from operations that would be reported on the variable costing income statement?

• A) $18,900
• B) $18,200
• C) $18,000
• D) $21,000

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Definitions:

Economic Profits

The discrepancy between a corporation's total earnings and all of its costs, covering both overt and hidden expenses.

Competitive Market

A market structure characterized by a large number of sellers and buyers, where no single entity can dictate prices or market conditions.

Market Price

The current price at which a good or service can be bought or sold in a given market.

Economic Profits

Profits calculated by subtracting both explicit and implicit costs from total revenues, representing the additional income earned over and above the opportunity costs.