Freetown Corporation Incurred Fixed Manufacturing Costs of $34,000 During 2017

question 153

Multiple Choice

Freetown Corporation incurred fixed manufacturing costs of $34,000 during 2017.Other information for 2017 includes:
The budgeted denominator level is 2,000 units.
Units produced total 1,800 units.
Units sold total 1,300 units.
Beginning inventory was zero.
The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold.
Operating income using absorption costing will be ________ than operating income if using variable costing.(Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar. )

• A)$11,900 higher
• B)$9,444 lower
• C)$8,500 higher
• D)$22,100 lower

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Definitions:

Whistleblowing

The act of exposing any kind of information or activity within a private, public, or government organization that is deemed illegal, unethical, or not correct.

Stakeholder Social Responsibility

The duty and ethical obligation of an organization to consider and respond to the needs and interests of its stakeholders, including customers, employees, and the wider community.

Social Responsibility

The practice of acting ethically while understanding your actions are part of the larger, interactive picture of your workplace, community, and world.

Corporate Responsibility

The ethical obligation of a company to act in ways that benefit society and the environment, beyond its business interests.