Frazer Corp Sells Several Products

question 2

Multiple Choice

Frazer Corp sells several products. Information of average revenue and costs is as follows:

What is the operating income earned if the company sells 20,000 units?

• A) $279,000
• B) $296,000
• C) $325,000
• D) $227,000

---

Definitions:

Operation of Law

A way in which rights or liabilities are automatically transferred or changed due to existing legal rules, rather than the action of the parties.

Implied Warranty

An unwritten and unspoken guarantee that a product or service will meet a minimum level of quality and will perform as expected, even though it is not explicitly stated in a contract.

Merchantability

A warranty that goods sold will meet a minimum level of quality and will be fit for the purpose for which they are sold.

Implied Warranty

A legal assurance that goods or services meet a minimum level of quality, irrespective of whether it has been explicitly stated.