McCoy Corporation Manufactures a Computer Monitor

question 52

Multiple Choice

McCoy Corporation manufactures a computer monitor. Shown below is McCoy's cost structure:
In its first year of operations, McCoy produced 100,000 monitors but only sold 95,000. McCoy's gross margin in this first year was $2,629,600. McCoy's contribution margin in this first year was $2,109,000.
-Under variable costing,what is McCoy's net operating income for its first year?

• A) $266,000
• B) $741,000
• C) $1,261,600
• D) $2,173,600

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price within a specified time period.

Substitutes

Products or services that can serve as replacements for each other, satisfying the same customer need or want.

Price Elasticity

A calculation that expresses how demand for a certain product varies in reaction to its pricing shifts.

Luxury

Products or services viewed as luxurious and not necessary, frequently linked with premium quality and a high cost.