Red River Company Sells Its Product for $12,000 Per Unit

question 112

Multiple Choice

Red River Company sells its product for $12,000 per unit. Variable costs per unit are: Manufacturing overhead -$8,000
Selling and administrative -$150
Fixed costs are:
Manufacturing overhead -$30,000
Selling and administrative -$40,000
Red River had no beginning inventory at January 1, 2010. Production was 20 units each year in 2010, 2011, and 2012. Sales were 20 units in 2010, 16 units in 2011, and 24 units in 2012.
Income/(Loss) under absorption costing for 2012 is:

• A)$7,000.
• B)($2,400).
• C)$16,400.
• D)$56,400.
• E)$60,000.

---

Definitions:

Reality Therapy

A form of counseling developed by William Glasser that emphasizes personal responsibility and focuses on the present.

Existential Guilt

A condition arising from feeling responsible for not fully utilizing one's freedom to choose or for not living authentically according to one's values and potential.

Inauthenticity

The state or quality of not being genuine or true to one's own personality, spirit, or character.

Perceived Social Norms

Individuals' beliefs about the behaviors and attitudes that are considered acceptable or typical within their social group or society.