Franz Began Business at the Start of This Year and Had

question 18

Multiple Choice

Franz began business at the start of this year and had the following costs: variable manufacturing cost per unit, $9; fixed manufacturing costs, $60,000; variable selling and administrative costs per unit, $2; and fixed selling and administrative costs, $220,000. The company sells its units for $45 each. Additional data follow. $\begin{array}{lr}\text { Planned production in units } & 10,000 \\\text { Actual production in units } & 10,000 \\\text { Number of units sold } & 8,500\end{array}$ There were no variances.
The income (loss) under absorption costing is:

• A) $(7,500).
• B) $9,000.
• C) $15,000.
• D) $18,000.
• E) None of the other answers are correct.

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Definitions:

Normal Operational

Normal Operational refers to the standard, routine, or expected processes and functions of a system, machine, or organization under regular or usual conditions.

Sensorimotor

A developmental stage in young children characterized by learning through interacting with their environment using senses and muscle movements.

Formal Operational

The stage in Piaget’s theory of cognitive development where individuals learn to think logically about abstract concepts and hypothetical situations.

Concrete Operational

A stage in Piaget's theory of cognitive development where children gain the ability to think logically about concrete events.