Harris Corporation Produces a Single Product

question 158

Multiple Choice

Harris Corporation produces a single product. Last year, Harris manufactured 17,000 units and sold 13,000 units. Production costs for the year were as follows: Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and fixed selling and administrative expenses were $170,000. There was no beginning inventory. Assume that direct labor is a variable cost. Under variable costing, the company's net operating income for the year would be:

• A)$60,000 higher than under absorption costing
• B)$108,000 higher than under absorption costing
• C)$108,000 lower than under absorption costing
• D)$60,000 lower than under absorption costing

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Definitions:

Low-Birth-Weight

A term describing babies born weighing less than 2,500 grams (5.5 pounds), often associated with developmental and health risks.

Fat Deposits

Accumulations of adipose tissue in the body, which serve as energy storage but can lead to health issues like obesity if excessive.

Immune System

The body’s complex network of cells, tissues, and organs that work together to defend against foreign substances, pathogens, and diseases.

Stillborn Death

The occurrence of a baby being born dead after 24 weeks of pregnancy.