Kym Manufacturing Provided the Following Information for Last Month

question 124

Multiple Choice

Kym Manufacturing provided the following information for last month: If sales double next month, what is the projected operating income?

• A) $14,000
• B) $15,000
• C) $18,000
• D) $19,000

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Definitions:

Positive Goodwill

The excess of purchase price over the fair market value of a company's identifiable assets minus liabilities, reflecting the value of a company's brand, reputation, and other intangible assets.

Carrying Values

The recorded cost of an asset in a company's financial statements, minus any accumulated depreciation or amortization.

Proportionate Consolidation Method

An accounting technique used to combine a company's share of the assets, liabilities, income, and expenses of a jointly controlled entity on a line-by-line basis in its financial statements.

Fair Value Enterprise Method

A valuation approach determining the price a willing buyer would pay for an entire business in an orderly and open market transaction.