Farron Company, Which Has Only One Product, Has Provided the Following

question 104

Multiple Choice

Farron Company, which has only one product, has provided the following data concerning its most recent month of operations: $\begin{array}{|l|r|}\hline \text { Selling price } & \$ 92 \\\hline \text { Units in beginning inventory } & 0 \\\hline \text { Units produced } & 8,700 \\\hline \text { Units sold } & 8,300 \\\hline \text { Units in ending inventory } & 400 \\\hline \text { Variable costs per unit: } & \\\hline \text { Direct materials } & \$ 13 \\\hline \text { Direct labour } & \$ 55 \\\hline \text { Variable manufacturing overhead } & \$ 1 \\\hline \text { Variable selling and administrative } & \$ 5 \\\hline \text { Fixed costs: } & \\\hline \text { Fixed manufacturing overhead } & \$ 130,500 \\\hline \text { Fixed selling and administrative } & \$ 8,300 \\\hline\end{array}$
-What was the operating income (loss) for the month under variable costing?

• A) ($17,000).
• B) $6,000.
• C) $10,600.
• D) $16,600.

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Definitions:

Independent Variables

Variables in an analysis that are manipulated or categorized to determine their effect on dependent variables.

Sample Size

The number of observations or elements included in a sample drawn from a population for analysis.

Estimated Multiple Regression

A statistical technique that estimates the relationship between a dependent variable and multiple independent variables.

Regression Plane

The regression plane is a three-dimensional graphical representation used in multiple regression analysis that shows the relationship between two independent variables and one dependent variable.