Walker’s Manufacturing Began Its Operations on January 1 of the Current

question 27

Essay

Walker’s Manufacturing began its operations on January 1 of the current year. Walker produced 10,000 units during the year, sold 8,000 units at an average cost of $22 per unit, and had 2,000 units in ending inventory. Variable production costs were $14 per unit, variable selling expenses were $2 per unit, fixed overhead totaled $12,000, and fixed selling and administrative expenses totaled $30,000. Under absorption costing, what was Walker’s operating income?
A) $26,000
B) $6,000
C) $8,400
D) $10,000

• A) $26,000
• B) $6,000
• C) $8,400
• D) $10,000

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Definitions:

U.S. Labor Law

Legislation and legal standards in the United States that govern the relationship between employers, employees, and labor unions.

Property Rights

Legal rights to use, control, and dispose of property, which can include tangible assets like real estate and intangible rights like intellectual property.

Labor Rights

Legal rights and protections afforded to workers, including the right to fair wages, safe working conditions, and freedom from discrimination and harassment.

Sherman Antitrust Act

A landmark federal statute passed in the United States in 1890 that prohibits monopolistic business practices and promotes competition.