Rede Inc Manufactures a Single Product

question 171

Multiple Choice

Rede Inc. manufactures a single product. Variable costing net operating income was $63,800 last year and its inventory decreased by 300 units. Fixed manufacturing overhead cost was $4 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year?

• A)$65,000
• B)$1,200
• C)$63,800
• D)$62,600

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Definitions:

Mutually Exclusive

Events or propositions that cannot both be true or occur at the same time, implying the occurrence of one event excludes the occurrence of the other.

P(A)

The probability of event A occurring.

P(B)

The probability of event B occurring.

Relative Frequency Approach

A method of probability assessment that involves observing the outcomes of a random experiment to estimate the probability of each outcome by dividing the number of times a specific outcome occurs by the total number of trials.