Petra, Inc What Is the Operating Income Using Absorption Costing? (Round Any

question 26

Multiple Choice

Petra, Inc. has collected the following data. (There are no beginning inventories.) : $$\begin{array} { | l | r | l | } \hline \text { Units produced } & 480 & \text { units } \\\hline \text { Units sold } & 480 & \text { units } \\\hline \text { Sales price } & \$ 210 & \text { per unit } \\\hline \text { Direct materials } & \$ 40 & \text { per unit } \\\hline \text { Direct labor } & \$ 35 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 30 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 11,000 & \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 10 & \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 10,000 & \text { per year } \\\hline\end{array}$$ What is the operating income using absorption costing? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

• A) $39,400
• B) $34,600
• C) $24,600
• D) $29,400

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Definitions:

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Natural underground reservoirs that store water, sourced from rain or melting snow that seeps through soil and rocks.

Excessive Rainfall

An unusually high amount of precipitation over a period of time, potentially leading to flooding and other water-related issues.

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Regions in the ocean designated for fishing activities, often defined by environmental conditions or regulatory boundaries.

Biodiversity

The variety and variability of life on Earth, including species diversity, ecosystem diversity, and genetic diversity.