Answer the Following Questions Using the Information Below

question 181

Multiple Choice

Answer the following questions using the information below:
Holly's Ham, Inc. sells hams during the major holiday seasons. During the current year 11,000 hams were sold resulting in $220,000 of sales revenue, $55,000 of variable costs, and $24,000 of fixed costs.
-If selling price per unit is $30, variable costs per unit are $20, total fixed costs are $10,000, the tax rate is 30%, and the company sells 5,000 units, net income is:

• A)$12,000
• B)$14,000
• C)$28,000
• D)$40,000

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Definitions:

Direct Labor Cost

The wages and related expenses for employees who are directly involved in the production of goods or services.

Factory Labor Costs

Expenses associated with employing labor in a manufacturing setting, including wages, salaries, and benefits.

Manufacturing Overhead

All manufacturing costs other than direct labor and direct materials that are involved in the creation of a product.

Work in Process Inventory

Goods that are in various stages of the production process but are not yet completed products.