A Company Had $7,000,000 in Net Income for the Year

question 275

Multiple Choice

A company had $7,000,000 in net income for the year.Its net sales were $11,200,000 for the same period.Calculate its profit margin.

• A)17.5%
• B)28%
• C)62.5%
• D)160%
• E)$18.2 million

Distinguish between different cost categorizations and the implications for financial reporting.

Understand the departmental overhead rate method and its steps.

Recognize the direct and indirect costs in manufacturing and their relation to product costing.

Identify the differences between various overhead allocation methods (departmental, plantwide, ABC).

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Definitions:

Rights

Charter of entitlements and freedoms guaranteed to individuals, often protected by law.

Utilitarian Principle

A philosophical concept that actions are right if they are useful or for the benefit of the majority.

Greatest Happiness

A principle stating that actions are right in proportion as they tend to promote overall happiness, identifying happiness with the maximum pleasure and minimum pain.

Rule Consequentialism

An ethical theory that suggests the moral correctness of an action depends on the consequences of following rules that are designed to promote the greatest good.