Alltech Inc What Is the Operating Income Using Absorption Costing If 500

question 129

Multiple Choice

Alltech Inc.has collected the following data.(There are no beginning inventories.) $\begin{array}{|l|r|l|}\hline \text { Units produced } & 510 &\text { units } \\\hline \text { Sales price } & \$ 120& \text { per unit } \\\hline \text { Direct materials } & \$ 19& \text { per unit } \\\hline \text { Direct labor } & \$15 &\text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 9 &\text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 16,000& \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 10& \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 12,100& \text { per year } \\\hline\end{array}$ What is the operating income using absorption costing if 500 units are sold? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

• A)$6600
• B)$5715
• C)$11,171
• D)$19,015

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Definitions:

M2 Measure

A broad measure of money supply that includes cash, checking deposits, savings deposits, money market securities, mutual funds, and other time deposits.

Risk-Free Return

The theoretical return on an investment with zero risk, often associated with government bonds or treasury bills.

Jensen Measure

A performance metric that evaluates a portfolio manager's ability to generate excess returns relative to a benchmark, adjusting for risk.

Risk-Free Return

The return on an investment with zero risk, typically associated with U.S. Treasury securities.