What Was the Absorption Costing Net Operating Income This Year

question 130

Multiple Choice

What was the absorption costing net operating income this year?

• A)$55,000
• B)$73,000
• C)$44,000
• D)$84,000

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Definitions:

Marginal Cost

The increase in cost that arises from producing one additional unit of a good or service.

Production Level

The quantity of goods or services that a company is capable of producing over a given period of time.

Marginal Costs

The amount spent on producing an extra unit of a product or service.

Fixed Costs

Costs that do not vary with the level of output or sales in the short term, such as rent or salaries.