Cutterski Corporation Manufactures a Propeller

question 43

Multiple Choice

Cutterski Corporation manufactures a propeller.Shown below is Cutterski's cost structure: In its first year of operations,Cutterski produced 60,000 propellers but only sold 54,000. Which costing method (variable or absorption) will generate a higher net operating income in Cutterski's first year of operations and by how much?

• A)variable by $81,000
• B)variable by $108,000
• C)absorption by $81,000
• D)absorption by $108,000

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Definitions:

Phylum

A phylum is a major taxonomic category in the classification of living organisms, ranking above class and below kingdom, grouping together organisms with a shared body plan or significant similarities in structure or ancestry.

Taxonomic Category

A level or rank in the system of classifying organisms, such as species, genus, family, etc., used in biological classification to organize the diversity of life.

Family

A social unit of individuals related by blood, marriage, or adoption, living together or maintaining close emotional ties.

Transcription

The process of conversion of instructions from DNA into RNA.