Marshall,Inc The Beginning Finished Goods Inventory Costs Were $3800 Under Absorption

question 97

Multiple Choice

Marshall,Inc.has collected the following data for the current year: $$\begin{array} { | l | r | c | } \hline \text { Beginning Finished Goods Inventory } & 50 & \text { units } \\\hline \text { Units produced } & 560 & \text { units } \\\hline \text { Units sold } & 610 & \text { units } \\\hline \text { Sales price } & \$ 180 & \text { per unit } \\\hline \text { Direct materials } & \$ 27 & \text { per unit } \\\hline \text { Direct labor } & \$ 16 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 15 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 16,900 & \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 7 & \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 13,500 & \text { per year } \\\hline\end{array}$$ The beginning Finished Goods Inventory costs were $3800 under absorption costing and $2000 under variable costing.
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) $56,619
• B) $38,849
• C) $52,349
• D) $3800

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Definitions:

Cash Flow

The total amount of money being transferred in and out of a business, especially affecting liquidity.

Accounts Receivable

Money owed to a company by customers for products or services that have been delivered or used but not yet paid for.

Unearned Sales Revenue

Money received by a company for goods or services yet to be delivered or performed.

Depreciable Asset

An asset subject to depreciation, representing the decline in value over time due to use, wear and tear, or obsolescence.