Springer Began Business at the Start of the Current Year

question 36

Multiple Choice

Springer began business at the start of the current year. The company planned to produce 40,000 units, and actual production conformed to expectations. Sales totaled 37,000 units at $42 each. Costs incurred were: $\begin{array}{lr}\text { Variable manufacturing overhead per unit } & \$ 19 \\\text { Fixed manufacturing overhead } & 240,000 \\\text { Variable selling and administrative cost per unit } & 7 \\\text { Fixed selling and administrative cost per unit } & 140,000\end{array}$ If there were no variances, the company's absorption-costing income would be:

• A) $155,000.
• B) $230,000.
• C) $240,500.
• D) $592,000.
• E) None of the other answers are correct.

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Definitions:

Defect Free

A state or condition where a product, service, or process is free of flaws, errors, or deficiencies, meeting all specified requirements.

Six Sigma

A methodological approach aimed at improving processes by identifying and eliminating defects.

Remove Variability

The process of minimizing differences in processes or products to ensure consistency and reliability.

Need To Know

A principle limiting access to information to individuals whose knowledge of that information is necessary for them to perform their duties.