The Following Table Shows the Annual Income Statement of Max

question 52

Multiple Choice

The following table shows the annual income statement of Max Computers. Table 22.3
Refer to the Table 22.3.The net income of Max Computers is:

• A)$10, 000 million.
• B)$25, 000 million.
• C)$11, 000 million.
• D)$13, 000 million.
• E)$12, 500 million.

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Definitions:

High-low Method

A technique used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.

Variable Cost

Costs that vary in proportion to the level of production or business activity, such as materials and direct labor.

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance premiums.

Relevant Range

The range of activity within which assumptions made about cost behavior are valid. Beyond this range, fixed and variable cost patterns may change.