Wind Fall,a Manufacturer of Leaf Blowers,began Operations This Year

question 20

Multiple Choice

Wind Fall,a manufacturer of leaf blowers,began operations this year.During this year,the company produced 10,000 leaf blowers and sold 8,500.At year-end,the company reported the following income statement using absorption costing: Production costs per leaf blower total $20,which consists of $16 in variable production costs and $4 in fixed production costs (based on the 10,000 units produced) .Fifteen percent of total selling and administrative expenses are variable.Compute net income under variable costing.

• A)$146,500
• B)$158,500
• C)$237,500
• D)$206,500
• E)$246,500

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Definitions:

Subsidiaries

Companies that are controlled by a parent company through majority ownership or significant control over management decisions.

Disclosure Exemption

A provision allowing an entity to not disclose certain information that is normally required by accounting standards.

Government-related Entities

Entities that are controlled, jointly controlled or significantly influenced by a government.

Quantitative Indication

Numerical evidence or metrics that signal the performance, situation, or condition of an entity or market.