Given Advanced Company's Data,and the Knowledge That the Product Is

question 119

Multiple Choice

Given Advanced Company's data,and the knowledge that the product is sold for $50 per unit and operating expenses are $200,000,compute the net income under absorption costing.

• A)$55,000
• B)$67,500
• C)$80,500
• D)$122,500
• E)$205,000

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Definitions:

Step-Fixed Costs

Costs that remain constant for a certain level of activity but jump to a higher level when activity increases beyond that threshold.

Production Line

A production line is an arrangement of machines and workers in a factory where a succession of operations is performed on a product to complete its manufacture.

Labour Time

The amount of time that workers spend in the production of goods or services.

Cost Driver

A factor that causes a change in the cost of an activity or process, used to assign costs based on actual consumption of resources.