Professors at a Local University Earn an Average Salary of $80,000

question 1

Multiple Choice

Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. With the beginning of the next academic year, all professors will get a 2% raise. What will be the average and the standard deviation of their new salaries?

• A) $80,000 and $6,120.
• B) $81,600 and $6,000.
• C) $81,600 and $6,120.
• D) $82,000 and $6,200.

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Definitions:

Variable Costing

An accounting method that only allocates variable costs to inventory, treating fixed costs as expenses of the period.

Absorption Costing

A method of costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Operating Income

Operating income is the profit realized from a company's regular business operations, excluding deductions of interest and taxes, as well as any gains or losses from non-operating activities.

Direct Costing

A cost accounting method where only variable costs (direct materials, direct labor, variable manufacturing overhead) are included in product costs, fixed overhead costs are expensed in the period they are incurred.