Triple M Company
Triple M Company Had the Following Data

question 20

Multiple Choice

Triple M Company
Triple M Company had the following data for the month: $$\begin{array}{l}\text { Variable costs per unit: }\\\begin{array} { l r } \text { Direct materials } & \$ 4.00 \\\text { Direct labour } & 3.20 \\\text { Variable manufacturing overhead } & 1.00 \\\text { Variable selling expenses } & 0.40\end{array}\end{array}$$ Fixed manufacturing overhead is $4,000 per month, which is applied to production on the basis of normal activity of 2,000 units. During the month, 2,000 units were produced. The company started the month with 300 units in beginning inventory, with unit product cost equal to this month's unit product cost. A total of 2,100 units were sold during the month at sales price of $14 per unit. Selling and administrative expense for the month, all fixed, totalled $3,600.
-Refer to Triple M Company. What is the operating income using the absorption costing method?

• A) ($540)
• B) $3,540
• C) $3,740
• D) $7,980

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Definitions:

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