Presented Below Is the Production Data for Six Months of the Year

question 103

Multiple Choice

Presented below is the production data for six months of the year showing the mixed costs incurred by Kennedy Company.
$\begin{array}{lll}\text { Month }&\text { Cost }&\text { Units }\\\text { July } & \$ 6,000 & 4,000 \\\text { August } & \$ 10,250 & 6,500 \\\text { September } & \$ 10,500 & 8,000 \\\text { October } & \$ 12,700 & 10,500 \\\text { November } & \$ 14,000 & 12,000 \\\text { December } & \$ 10,850 & 9,000\end{array}$
Kennedy Company uses the high-low method to analyze mixed costs.The total fixed cost is ________.

• A) $2,000
• B) $4,500
• C) $10,417
• D) $10,500

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold (COGS), indicating how much a company earns from its core business activities.

Multiple-Step Income Statement

A comprehensive income statement that separates operating revenues and expenses from non-operating ones, providing a detailed view of a company's financial activities.

Single-Step Income Statement

An income statement format that deducts total expenses from total revenues with one calculation, to find the net income.

Operating Income

Profit realized from a business's core operations, excluding deductions of interest and taxes.