Alltech Inc What Is the Operating Income Using Absorption Costing If 500

question 228

Multiple Choice

Alltech Inc.has collected the following data.(There are no beginning inventories.) $$\begin{array} { | l | r | c | } \hline \text { Units produced } & 510 & \text { units } \\\hline \text { Sales price } & \$ 150 & \text { per unit } \\\hline \text { Direct materials } & \$ 16 & \text { per unit } \\\hline \text { Direct labor } & \$ 10 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 10 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 16,000 & \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 9 & \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 10,500 & \text { per year } \\\hline\end{array}$$ What is the operating income using absorption costing if 500 units are sold? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

• A) $27,500
• B) $26,315
• C) $31,641
• D) $38,315

Analyze the effects of changes in input prices on the position and slope of isocost lines.

Interpret the implications of expenditure changes on isocost positioning.

Calculate total costs given input prices and isocost information.

Distinguish between the slopes of different isocost lines and their significance.

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Definitions:

Excise Tax

A specific type of tax levied on particular goods, services, or transactions, often included in the price of items such as gasoline, alcohol, and tobacco.

Taxable Income

The portion of an individual's or a corporation's income that is subject to taxes according to governmental regulations.

Marginal Tax Rate

The tax rate that applies to the next dollar of taxable income, indicating the percentage of any additional income that will be paid in taxes.

Taxable Income

The portion of an individual's or corporation's income that is subject to taxes by the government, after all deductions and exemptions.