Dent Corporation Had Net Income of $182,000 Based on Variable

question 49

Multiple Choice

Dent Corporation had net income of $182,000 based on variable costing.Beginning and ending inventories were 5,000 units and 8,000 units,respectively.Assume the fixed overhead per unit was $3 for both the beginning and ending inventory.What is net income under absorption costing?

• A) $173,000
• B) $221,000
• C) $191,000
• D) $143,000
• E) $185,000

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Definitions:

Information About Quality

Knowledge or data regarding the characteristics or attributes of a product or service that determine its overall value to a consumer.

Product-Variety Externality

External benefits or costs to society resulting from a variety of products beyond what would be provided by market forces alone.

Business-Stealing Externality

A negative externality that occurs when new products or services enter a market, reducing the sales and profitability of existing products or services.

Spillover Costs

Costs that affect parties who are not directly involved in a transaction or economic activity.