The Changes in Account Balances for Elder Company for 2009

question 19

Multiple Choice

The changes in account balances for Elder Company for 2009 are as follows: Assuming the only changes in retained earnings in 2009 were for net income and a $50,000 dividend, what was net income for 2009?

• A)$40,000.
• B)$60,000.
• C)$70,000.
• D)$90,000.

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Definitions:

Factory Overhead

Factory overhead refers to the indirect manufacturing costs not directly tied to the production of goods, such as utilities or management salaries.

Machine Hours

The total operating time of a machine, used as a basis for allocating manufacturing overhead.

Conversion Costs

Costs incurred to convert raw materials into finished products, generally including direct labor and manufacturing overhead.

Materials Cost

The cost of raw materials and components used to create a product.