Medbam,Inc

question 110

Multiple Choice

Medbam,Inc.has collected the following data.(There are no beginning inventories. ) :

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)$28,500
• B)$21,000
• C)$6,000
• D)$13,500

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Definitions:

Accounts Receivable-James

An account showing the amount of money owed to a business by a particular customer, James, for products or services that have been delivered or used but not yet paid for.

Initial Write-off

The action of recognizing that a particular asset has lost value and accounting for it as an expense.

Partial Payment

A payment made that is not in full settlement of a debt but is instead a portion of the total amount owed.

Allowance for Doubtful Accounts

An estimate of the amount of credit sales that are expected to become uncollectible, used to adjust accounts receivable to its net realizable value.