Docherty, Inc The Operating Income Calculated Using Variable Costing and Absorption Costing

question 57

Multiple Choice

Docherty, Inc. reports the following information for the year ended December 31: $$\begin{array} { | l | r | l | } \hline \text { Units sold } & 600 & \text { units } \\\hline \text { Sales price } & \$ 120 & \text { per unit } \\\hline \text { Direct materials } & \$ 29 & \text { per unit } \\\hline \text { Direct labor } & \$ 8 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 13 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 25 & \text { per unit } \\\hline \text { Variable selling and administrative costs } & \$ 5 & \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 14,500 & \text { per year } \\\hline\end{array}$$ The operating income calculated using variable costing and absorption costing amounted to $9800 and $11,000, respectively. There were no beginning inventories. Determine the total number of units produced during the year.

• A) 600 units
• B) 648 units
• C) 10 units
• D) 48 units

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Definitions:

Normal Visual Development

The process through which individuals gain and improve their ability to see clearly, recognize shapes, distinguish colors, and perceive depth and dimensions as they grow.

Cataracts

A medical condition that causes clouding of the eye's natural lens, leading to decreased vision, which is commonly related to aging.

Blind Spots

Areas in our perception where we lack awareness or understanding, often used metaphorically; in vision, the part of the retina without photoreceptors, where the optic nerve exits, leading to a lack of visual detection.

Decibels

A logarithmic unit of measurement that expresses the magnitude of a physical quantity (originally sound intensity) relative to a specified or implied reference level.