Reference: 19_03
Scavenger Company, a Manufacturer of Recycling Bins, Began

question 30

Multiple Choice

Reference: 19_03
Scavenger Company, a manufacturer of recycling bins, began operations on January 1 of the current year. During this time, the company produced 60,000 units and sold 55,000 units at a sales price of $15 per unit. Cost information for this year is shown in the following table:

$\begin{array}{ll}\text { Production costs } & \\\quad \text { Direct materials } & \$ 2.50 \text { per unit } \\\text { Direct labor } & \$ 3.00 \text { per unit } \\\text { Variable overhead } & \$ 45,000 \text { in total } \\\quad \text { Fixed overhead } & \$ 240,000 \text { in total } \\\text { Nonproduction costs } & \\\quad \text { Variable selling and administrative } & \$ 10,000 \text { in total } \\\text { Fixed selling and administrative } & \$ 50,000 \text { in total }\end{array}$


-Given the Star Services Inc.data,what is net income using variable costing?

• A) $18,670,000
• B) $18,774,000
• C) $16,360,000
• D) $11,274,000
• E) $11,170,000

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Definitions:

Intangible Assets

Assets that lack physical substance but possess economic value, including intellectual property, trademarks, and goodwill.

Cost Allocation

The process of distributing or assigning an organization's costs, or expenses, across various departments, projects, or products.

Asset Acquisition

Asset acquisition refers to the process of obtaining control over assets, typically through purchase or lease, for use in operations.

Straight-Line Depreciation

Straight-line depreciation is an accounting method wherein an asset's cost is evenly distributed over its estimated useful life, leading to a consistent depreciation expense each year.