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

question 78

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 absorption costing approach?

• A)$(22,000)and $(15,800)
• B)$(24,750)and $(33,275)
• C)$(15,750)and $(21,175)
• D)$(24,500)and $(26,050)
• E)$18,000 and $24,200

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Definitions:

Price Ceiling

A government-imposed limit on the price charged for a product, aiming to prevent prices from rising above a certain level.

Equilibrium Price

The price point at which the amount of products offered matches the amount of products consumers want to buy.

Quantity Supplied

The level of a commodity or service that sellers are eager and qualified to sell at a set price over a designated period.

Market Equilibrium

The state in which market supply equals market demand, resulting in stable prices where producers and consumers agree.