A Company Produces a Single Product

question 159

Multiple Choice

A company produces a single product.Last year,fixed manufacturing overhead was $30,000,variable production costs were $48,000,fixed selling and administration costs were $20,000,and variable selling administrative expenses were $9,600.There was no beginning inventory.During the year,3,000 units were produced and 2,400 units were sold at a price of $40 per unit.Under variable costing,net operating income would be:

• A)a profit of $6,000.
• B)a profit of $4,000.
• C)a loss of $2,000.
• D)a loss of $4,400.

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Definitions:

Property Right

A legal right or interest in a property that allows the holder to use, modify, or transfer the property within the bounds of the law.

Federal Government

refers to the national government of a country, which is responsible for governing the country as a whole, as opposed to state, provincial, or local governments.

Clean Water Act

In environmental law, a federal statute that sets requirements for limiting the pollution of the nation’s water sources according to a schedule, based on the most effective technology currently available.

Pollutants

Substances that contaminate the environment, causing harm or discomfort to living organisms.