Amacon Corporation Has the Following Investments at December 31, 2012

question 133

Multiple Choice

Amacon Corporation has the following investments at December 31, 2012: If Amacon classifies its investment in DEF as available for sale, what amount will be reported in other comprehensive income at December 31, 2012?

• A)$3,000 loss
• B)$3,000 gain
• C)$5,000 gain
• D)$30,000

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Definitions:

Operating Efficiency

A measure of how well a company uses its resources to produce outputs, often assessed by comparing inputs to outputs in production processes.

Absorption Costing

An accounting method that includes all manufacturing costs, direct and indirect, in the cost of a product.

Operating Income

The profit realized from a business's core operations, excluding deductions of interest and tax as well as income from non-operating activities.

Variable Costing

A method of costing that includes only variable production costs (direct material, direct labor, and variable overhead) in the cost of goods sold.