A Company That Produces a Single Product Had a Net

question 85

Multiple Choice

A company that produces a single product had a net operating income of $75,000 using variable costing and a net operating income of $95,000 using absorption costing. Total fixed manufacturing overhead was $50,000 and production was 10,000 units both this year and last year. Last year was the first year of operations. Between the beginning and the end of the year, the inventory level:

• A)decreased by 20,000 units
• B)increased by 20,000 units
• C)decreased by 4,000 units
• D)increased by 4,000 units

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Definitions:

Acquiring Words

The process by which individuals learn and assimilate new vocabulary into their language use.

Infant

A very young child or baby, typically under one year of age.

Preschool Years

The period in a child's life before they attend kindergarten, typically from ages 3 to 5.

Acquire

To gain possession or ownership of something, often through purchase or effort.