Asked by maggie Radziszewski on Jun 08, 2024
Verified
Under absorption costing, what is Beach Corporation's actual net operating income for its first year?
A) $60,000
B) $115,200
C) $117,600
D) $124,800
Net Operating Income
A company's operating income after all operating expenses, excluding taxes and interest, have been deducted.
Absorption Costing
An accounting method that includes all manufacturing costs (direct materials, direct labor, and manufacturing overhead) in the cost of a product.
- Build an understanding of the method of absorption costing and its computation techniques.
- Quantify and describe the net operating income in the context of variable and absorption costing schemes.
Verified Answer
KM
kevin mabiriziJun 09, 2024
Final Answer :
B
Explanation :
Unit product cost under absorption costing: 
Absorption costing income statement 
Reference: CHO7-Ref13
Elbrege Corporation manufactures a single product.The company has supplied the following data:
There was no beginning inventory.During the year 25,000 units were produced and 20,000 units were sold.
Absorption costing income statement Reference: CHO7-Ref13Elbrege Corporation manufactures a single product.The company has supplied the following data:
There was no beginning inventory.During the year 25,000 units were produced and 20,000 units were sold.
Learning Objectives
- Build an understanding of the method of absorption costing and its computation techniques.
- Quantify and describe the net operating income in the context of variable and absorption costing schemes.