Groovelex Inc

question 72

Multiple Choice

Groovelex Inc.has collected the following data for the current year: The beginning inventory costs $3,750 under absorption costing and $2,500 under variable costing.
What is the operating income using absorption costing?

• A)$3,950
• B)$2,500
• C)$4,750
• D)$3,750

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Definitions:

Mortgage Payments

These are regular payments made by a borrower to a lender, typically consisting of both principal and interest, for the loan used to purchase property.

Present Value

The present-day valuation of a future lump sum or cash flow sequence, taking into account a defined rate of return.

Discounting Periods

The intervals at which cash flows are discounted back to their present value in financial analysis.

Annual Annuity

A financial product providing a series of payments made at equal intervals over a set period, typically one year.