Silver Company Produces a Single Product

question 41

Multiple Choice

Silver Company produces a single product. Last year, the company's variable production costs totaled $7,500 and its fixed manufacturing overhead costs totaled $4,500. The company produced 3,000 units during the year and sold 2,400 units. There were no units in the beginning inventory. Which of the following statements is true?

• A) Under variable costing, the units in the ending inventory will be costed at $4 each.
• B) The net operating income under absorption costing for the year will be $900 lower than the net operating income under variable costing.
• C) The ending inventory under variable costing will be $900 lower than the ending inventory under absorption costing.
• D) Under absorption costing, the units in ending inventory will be costed at $2.50 each.

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Definitions:

Punishment

The imposition of a penalty as retribution for an offense or undesirable behavior.

Extinction

In behavioral psychology, refers to the gradual weakening and disappearance of a conditioned response when it is no longer reinforced.

Performance Feedback

Information given to individuals or groups about the quality or effectiveness of their job performance, intended to facilitate improvement.

Verbal Representation

The expression or communication of ideas and thoughts through spoken words.