DeAnne Company's Variable Costing Income Statement for August Appears Below

question 98

Multiple Choice

DeAnne Company's variable costing income statement for August appears below:

DeAnne Company
Income Statement
For the month ended August 31
$\begin{array}{|l|l|l|}\hline \text { Sales }(\$ 15 \text { per unit) } & & \$ 600,000 \\\hline \text { Less: Variable costs } & & \\\hline \text { Variable cost of goods } & & \\\text { sold: } & &\\\text { Beginning inventory } & \$ 72,000 \\\hline \begin{array}{l}\text { Add: Variable cost of goods } \\\text { manufactured }\end{array} & \underline{315,000} \\\hline \text { Goods available for sale } & \$ 387,000 \\\hline \text { Less: Ending inventory } & \underline{27,000} \\\hline \text { Variable cost of goods sold } & \$ 360,000 \\\hline \text { Variable selling expense } & \underline{80,000} \\\hline\text { Total variable costs } & & \underline{\$ 440,000} \\\hline \text { Contribution margin } & & 160,000 \\\hline \text { Fixed costs: } & & \\\hline \text { Fixed manufacturing } & \$ 105,000 &\\ \text { overhead }\\\hline \begin{array}{l}\text { Fixed selling and } \\\text { administrative }\end{array} & \underline{35,000} & \\\hline \text { Total fixed costs } & & \$ 140,000 \\\hline \text { Operating income } & & \$ 20,000\\\hline\end{array}$ The company produces 35,000 units each month. Variable production costs per unit and total fixed costs have remained constant over the past several months.

-Under the absorption costing method,what was the dollar value of the company's inventory on August 31?

• A) $27,000.
• B) $36,000.
• C) $42,000.
• D) $47,000.

Recognize the constitutional basis for income tax via the Sixteenth Amendment.

Analyze the procedural aspects and taxpayer rights within the U.S. Tax Court.

Explain the role and limitations of Private Letter Rulings in tax authority.

Grasp the concept of progressive, proportional, and regressive tax rate structures.

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Definitions:

Tender Offers

A proposal by an entity or individual to purchase shares from the shareholders of a company at a specific price for a certain period.

Section 16(a)

A provision often found in legal documents that specifies particular regulations or requirements, the exact meaning depends on the context of the document.

Statutory Insiders

Individuals or entities, such as directors, officers, or major shareholders, who have access to a company's internal information, making them subject to specific legal requirements and restrictions.

1934 Act

Refers to the Securities Exchange Act of 1934, a U.S. federal law that governs the trading of securities in the secondary market, establishes the Securities and Exchange Commission, and lays down rules for exchanges and broker-dealers.