Docherty,Inc The Operating Income Calculated Using Variable Costing and Absorption Costing

question 96

Multiple Choice

Docherty,Inc.reports the following information for the year ended December 31: $$\begin{array} { | l | r | c | } \hline \text { Units sold } & 640 & \text { units } \\\hline \text { Sales price } & \$ 120 & \text { per unit } \\\hline \text { Direct materials } & \$ 28 & \text { per unit } \\\hline \text { Direct labor } & \$ 9 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 15 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 12 & \text { per unit } \\\hline \text { Variable selling and administrative costs } & \$ 4 & \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 12,700 & \text { per year } \\\hline\end{array}$$ The operating income calculated using variable costing and absorption costing amounted to $9400 and $11,200,respectively.There were no beginning inventories.Determine the total number of units produced during the year.

• A) 640 units
• B) 790 units
• C) 15 units
• D) 150 units

Comprehend the strategies needed to develop a successful brand.

Acknowledge how product adaptation can appeal to local preferences and cultures.

Recognize the role of consumer engagement through social media in brand promotion.

Understand the concept of brand equity and its impact on an organization.

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Definitions:

Production Rate

The speed at which goods are manufactured within a specified period.

Differential Revenue

The difference in revenue between two alternative decisions or periods.

Course of Action

A decision plan or set of steps to be followed to solve a problem or achieve an objective.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, used to cover fixed costs and generate profit.