Red and White Company Reported the Following Monthly Data -What Is Red White's Net Income Under Absorption Costing If

question 133

Multiple Choice

Red and White Company reported the following monthly data.
$$\begin{array} { l l } \text { Units produced } & 2,000 \text { units } \\\text { Sales price } & \$ 25 \text { per unit } \\\text { Direct materials } & \$ 1 \text { per unit } \\\text { Direct labor } & \$ 2 \text { per unit } \\\text { Variable overhead } & \$ 3 \text { per unit } \\\text { Fixed overhead } & \$ 8,000 \text { in total }\end{array}$$
-What is Red White's net income under absorption costing if 980 units are sold and operating expenses are $12,000:

• A) $(1,380)
• B) $(2,000)
• C) $2,700
• D) $6,620
• E) $10,620

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Definitions:

Watson

Watson refers to James Watson, an American molecular biologist, geneticist, and zoologist, best known as one of the co-discoverers of the structure of DNA in 1953 alongside Francis Crick.

Amino Acids

Fundamental components of proteins, each containing an amino group, a carboxylic acid group, and a unique side chain.

Double Helix

The structure of DNA, which consists of two antiparallel polynucleotide chains twisted around each other.

Polymer

is a chemical compound or mixture of compounds formed by polymerization and consisting essentially of repeating structural units.