Given Advanced Company's Data,and the Knowledge That the Product Is

question 119

Multiple Choice

Given Advanced Company's data,and the knowledge that the product is sold for $50 per unit and operating expenses are $200,000,compute the net income under absorption costing.

• A)$55,000
• B)$67,500
• C)$80,500
• D)$122,500
• E)$205,000

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Definitions:

Journalize

The process of recording transactions in a journal or diary in accounting, which includes the date, accounts affected, and amounts, followed by a brief description of the transaction.

Temporary Investments

Investments not intended to be held for a long term, such as stocks or bonds, purchased with the intention of selling in the near future.

Accounts Receivable

Money that is owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Quick Ratio

A liquidity measure that indicates a company’s ability to pay its current liabilities without relying on the sale of inventory, calculated as (current assets - inventories) / current liabilities.