Zhender Inc Full Costing Operating Income for 2018 Is Calculated to Be

question 96

Multiple Choice

Zhender Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit. Budgeted production in both 2018 and 2019 was 3,000 units. There was no beginning inventory in 2018. The following data summarized the 2018 and 2019 operations: $\begin{array}{lcc} & 2018 & 2019 \\\text { Units sold } & 2,500 & 3,200 \\\text { Units produced } & 3,000 & 3,000\\\text { Costs: }\\\text { Variable factory overhead per unit } & \$ 0.65 & \$ 0.65 \\\text { Fixed factory overhead } & \$ 1,290 & \$ 1,290 \\\text { Variable marketing per unit } & \$ 0.80 & \$ 0.80 \\\text { Fixed Selling and Administrative } & \$ 650 & \$ 650\end{array}$ Full costing operating income for 2018 is calculated to be:

• A) $935.
• B) $1,150.
• C) $1,200.
• D) $1,352.
• E) $1,395.

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Definitions:

Supervisory Expense

Supervisory expense relates to the costs associated with the oversight and management of employees or production processes, often part of overhead costs.

Activity Rate

The predetermined rate used to allocate overhead costs to cost objects based on activities.

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities required to produce each product or service, aiming for more precise cost allocation.

Overhead Cost

All indirect costs associated with the operation of a business, including administrative expenses, depreciation, and utilities.