(Appendix 6A) Dallavalle Corporation Manufactures and Sells One Product

question 34

Multiple Choice

(Appendix 6A) Dallavalle Corporation manufactures and sells one product. The following information pertains to the company's first year of operations:
The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 32,000 units and sold 31,000 units. The company's only product is sold for $238 per unit.
-The company is considering using either super-variable costing or an absorption costing system that assigns $10 of direct labor cost and $67 of fixed manufacturing overhead to each unit that is produced.Which of the following statements is true regarding the net operating income in the first year?

• A) Super-variable costing net operating income exceeds absorption costing net operating income by $1,000.
• B) Super-variable costing net operating income exceeds absorption costing net operating income by $77,000.
• C) Absorption costing net operating income exceeds super-variable costing net operating income by $77,000.
• D) Absorption costing net operating income exceeds super-variable costing net operating income by $1,000.

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Definitions:

Consequentialist Theory

A moral theory that judges the rightness or wrongness of actions based solely on their outcomes or consequences.

Ethics of Care

A philosophical perspective that emphasizes interpersonal relations and the importance of compassion, empathy, and emotional response in moral judgment.

Utilitarianism

An ethical theory that proposes actions are right if they are useful or for the benefit of a majority.

Risk-Benefit Analysis

The assessment of potential risks and benefits associated with a medical treatment or intervention to make informed decisions.