Rusty's 2016 Income Statement Would Report Net Sales Of

question 130

Multiple Choice

Rusty's 2016 income statement would report net sales of:

• A)$600,000.
• B)$564,000.
• C)$568,000.
• D)$604,000.

---

Definitions:

Income Statement

A financial report that shows the company's revenues and expenses over a specified period, resulting in net profit or loss.

Absorption Costing

A financial approach that incorporates every aspect of manufacturing expenses, such as direct materials, direct labor, and all variable and fixed overhead costs, into the price of a product.

Variable Costing

An accounting methodology that assigns only variable costs to inventory, treating fixed costs as expenses of the period.

Operating Income

Refers to the profit realized from a business's core operating activities, excluding deductions of interest and taxes.