Last Year,Silver Company's Total Variable Production Costs Were $7,500,and Its

question 37

Multiple Choice

Last year,Silver Company's total variable production costs were $7,500,and its total fixed manufacturing overhead costs were $4,500.The company produced 3,000 units during the year and sold 2,400 units.There were no units in the beginning inventory.Which of the following statements is true?

• A) Under variable costing, the average cost of the units in the ending inventory will be $4 each.
• B) The operating income under absorption costing for the year will be $900 lower than the operating income under variable costing.
• C) The ending inventory under variable costing will be $900 lower than the ending inventory under absorption costing.
• D) Under absorption costing, the average cost of the units in ending inventory will be $2.50 each.

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Definitions:

Greatest Good

A principle often used in ethics and philosophy that refers to the action or policy that maximizes happiness or welfare for the greatest number of people.

Corporate Culture

The shared values, beliefs, and practices that shape the social and psychological environment of a business organization.

Core Value

Fundamental beliefs or guiding principles that dictate behavior and action within an organization.

Stakeholder Interests

The varying objectives, needs, and concerns that stakeholders have in relation to an organization's actions and performance.