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:

Net Income

The net earnings of a company following the deduction of all costs, such as taxes and operational expenses, from its total income.

Limited Life

A feature of certain business entities where the business has a defined end date or event upon which it will dissolve.

Unlimited Liability

A legal obligation where a business owner or partner is personally responsible for all of the debts of the business.

Mutual Agency

A business principle where each partner in a partnership can act on behalf of the partnership, binding it contractually.