Baylor, Inc

question 74

Multiple Choice

Baylor, Inc. just finished its second year of operations. In the first year it produced 1,000 units and sold 400. The second year resulted in the same production level, but sales were 1,200 units. The variable costing income statements for both years are shown below: Year 1 Year 2
Sales $ 40,000 $120,000
Variable cost of goods sold $22,000 $66,000
Variable selling and administration 800 22,800 2,400 68,400
Contribution margin 17,200 51,600
Fixed overhead 30,000 30,000
Fixed selling and administration 15,000 45,000 15,000 45,000
Operating income $(27,800) $ 6,600
The ending inventory for year 2 using absorption costing would be:

• A)$51,000
• B)$34,000
• C)$22,000
• D)$17,000

Grasp the importance and implications of bankruptcy laws and their impact on firm restructuring and creditor prioritization.

Recognize the significance of management approaches, including leadership and organizational climate, in overcoming business challenges.

Identify the protective measures and strategies against external forces leading to business difficulties.

Understand the challenges and strategies for fast-growth firms and the potential for difficulty they present.

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Definitions:

Finance

The science of managing funds, including the processes of borrowing, investing, saving, and forecasting.

Agency Problem

A conflict of interest arising between principals (such as shareholders) and agents (like company executives) due to differing goals.

Store Locations

The specific physical points where a business operates or has commercial premises.

Market Value

The marketplace's current rate for the buy or sell transactions of assets or services.