Petra,IncHas Collected the Following Data

question 141

Multiple Choice

Petra,Inc.has collected the following data.(There are no beginning inventories. ) :

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:

Provision for Loss

An accounting process to allocate anticipated losses from bad debts, depreciation, or other contingencies.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that are becoming the global standard for the preparation of public company financial statements.

Borrowing Costs

Interest and other costs that an entity incurs in connection with the borrowing of funds.

Development Costs

Costs incurred in the design and implementation of new products or processes, which can often be capitalized and amortized over time.