Dancause Corporation Manufactures and Sells a Single Product

question 39

Multiple Choice

Dancause Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During October, the company budgeted for 5, 100 units, but its actual level of activity was 5, 090 units.The company has provided the following data concerning the formulas to be used in its budgeting: The net operating income in the flexible budget for October would be closest to:

• A)$33, 869
• B)$25, 240
• C)$34, 003
• D)$25, 056

Understand the operation of merchandisers and retailers and the role of inventory in their financial transactions.

Grasp the implications and application of credit terms in sales transactions.

Identify the accounting treatment for sales tax payable and the importance of sales tax in financial transactions.

Understand the procedures for handling and recording merchandise returns from customers.

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Definitions:

Machines

Mechanical or electrical devices that perform or assist in performing tasks or calculations.

Average Cost

The total cost of production divided by the number of units produced, indicating the cost per unit of output.

Copper

A red-brown metal, highly conductive of electricity and heat, used extensively in electrical wiring and in making alloys such as bronze and brass.

Zinc

A metallic element used primarily for galvanizing iron and steel to prevent rust and in alloys such as brass, along with various other applications.