Hansen Company Produces a Single Product

question 187

Multiple Choice

Hansen Company produces a single product.During the last year,Hansen had net operating income under absorption costing that was $5,500 lower than its income under variable costing.The company sold 9,000 units during the year,and its variable costs were $10 per unit,of which $6 was variable selling expense.If fixed production cost is $5 per unit under absorption costing every year,then how many units did the company produce during the year?

• A)7,625 units
• B)8,450 units
• C)10,100 units
• D)7,900 units

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Definitions:

Average Tax Rate

Total amount of tax paid divided by total income.

Total Taxes

The aggregate amount of taxes collected by a government from individuals and businesses.

Taxable Income

The portion of an individual or entity's income that is subject to taxation, after deductions and exemptions, according to the law.

Deductions

Expenses or specific amounts that can be subtracted from one's gross income to reduce the taxable income.