Barry Corp

question 60

Multiple Choice

Barry Corp. reported 2014 net income of $40,000. However, the ending inventory in 2013 had been understated by $3,000, and 2014's ending inventory had been overstated by $6,000. Barry's correct net income for 2014 was

• A) $31,000
• B) $34,000
• C) $43,000
• D) $46,000

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Definitions:

Average Cost

the total cost of production divided by the number of units produced, used to evaluate the efficiency of production processes.

Producing Units

Departments or entities within an organization responsible for the creation of goods or provision of services.

Marginal Revenue (MR)

The increase in revenue that results from the sale of one additional unit of a product or service.

Marginal Cost (MC)

The expense associated with the production of an extra unit of a product or service.