Use the Information Below to Answer the Following Question(s)

question 25

Multiple Choice

Use the information below to answer the following question(s) .Beauty Supply Company manufactures shampoo.The supervisor has provided the following information and stated that standard costing is used for manufacturing, marketing, and administrative costs. There were no beginning or ending inventories of materials or work-in-process.
-What would Beauty Supply Company's operating income (loss) be for January and February, respectively, using the variable costing approach?

• A)$18,000 and $24,200
• B)$(45,000)and $(35,500)
• C)$(44,000)and $(33,809)
• D)$(42,000)and $(35,800)
• E)$(22,000)and $(15,800)

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Definitions:

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or to evaluate the attractiveness of an investment.

Incremental Cost Approach

A decision-making process that focuses on the changes in total cost resulting from a specific business decision, considering only the relevant costs and benefits that differ between alternatives.

Operating Costs

Expenses associated with running a business's core activities on a day-to-day basis, such as salaries, rent, and utilities.

Discount Rate

The discount rate that is employed during discounted cash flow evaluation to ascertain the present valuation of future expected cash flows.