Elison Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the net operating income for the month under absorption costing?

A) $8,700
B) $5,700
C) $14,400
D) $(12,000)

Question

Elison Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

What is the net operating income for the month under absorption costing?

A) $8,700
B) $5,700
C) $14,400
D) $(12,000)

David Shaker · Accepted Answer

Final Answer : C, Explanation :  Under absorption costing, fixed manufacturing overhead costs are included in the cost of goods sold. Therefore, the net operating income can be calculated as follows:Sales - Cost of Goods Sold (based on absorption costing) - Selling and Administrative Expenses = Net Operating Income$75,000 - ($40,000 + $12,000 + $8,000) - $10,600 = $14,400

Elison Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the net operating income for the month under absorption costing?

A) $8,700
B) $5,700
C) $14,400
D) $(12,000)

Definitions

Learning Objectives

Learning Objectives

Related questions

Elison Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the net operating income for the month under absorption costing?A) $8,700B) $5,700C) $14,400D) $(12,000)

Definitions

Learning Objectives

Learning Objectives

Related questions

Elison Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the net operating income for the month under absorption costing?

A) $8,700
B) $5,700
C) $14,400
D) $(12,000)