Gomez Company Has No Beginning and Ending Inventories,and Reports the Following

question 81

Multiple Choice

Gomez Company has no beginning and ending inventories,and reports the following data about its only product:
$\begin{array}{ll}\text { Direct materials used } & \$ 470,000 \\\text { Direct labor } & \$ 180,000 \\\text { Fixed indirect manufacturing } & \$ 130,000 \\\text { Fixed selling and administrative } & \$ 150,000\\\text { Variable indirect manufacturing } & \$ 120,000 \\\text { Variable selling and administrative } & \$ 60,000 \\\text { Selling price(per unit) } & \$ 100\end{array}$
$\begin{array} { l } \text {Units produced and sold }&30,000 \\\end{array}$

Gomez Company uses the contribution approach to prepare the income statement.What is the operating income?

• A) $1,890,000
• B) $2,100,000
• C) $2,190,000
• D) $2,250,000

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Definitions:

House Money

Refers to the concept of playing with the profits from previous bets rather than one's own capital.

Irrational Behavior

Actions or decisions that are not based on logical reasoning, sound judgment, or align with standard economic theories or expectations.

Regret Aversion

A behavior in decision-making where individuals or entities tend to avoid actions that could potentially lead to regret in the future.

Sentiment-based Risk

The risk of making investment decisions based on market sentiment rather than fundamental analysis.