Asked by Mikayla Muller on Jun 28, 2024
Verified
What is the net operating income for the month under absorption costing?
A) $8,700
B) $5,700
C) $14,400
D) $(12,000)
Net Operating Income
Net Operating Income (NOI) is a measure of a company's profitability from its core business operations, excluding expenses and revenues from financing and investing activities.
Absorption Costing
Absorption costing is an accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.
- Learn the basic idea of absorption costing and its calculation formula.
- Calculate and expound upon the net operating income employing variable and absorption costing methodologies.
Verified Answer
JJ
Jesse JamesJun 29, 2024
Final Answer :
C
Explanation :
Unit product cost under absorption costing: 
Reference: CHO7-Ref15
Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Reference: CHO7-Ref15Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Learning Objectives
- Learn the basic idea of absorption costing and its calculation formula.
- Calculate and expound upon the net operating income employing variable and absorption costing methodologies.