Asked by Romain Ndoutoume on Jun 02, 2024
Verified
What is the net operating income for the month under absorption costing?
A) $8,800
B) $24,800
C) $1,700
D) $12,200
Net Operating Income
The total profit of a company after operating expenses are subtracted from gross profit but before taxes and interest are deducted.
Absorption Costing
Accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.
- Grasp the essentials of absorption costing and the methodology for computing it.
- Estimate and interpret the net operating income through variable and absorption costing methods.
Verified Answer
ZK
Zybrea KnightJun 06, 2024
Final Answer :
A
Explanation : 
Reference: CHO7-Ref17
Keyser Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
The company produces the same number of units every month, although the sales in units vary from month to month.The company's variable costs per unit and total fixed costs have been constant from month to month.
Reference: CHO7-Ref17Keyser Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
The company produces the same number of units every month, although the sales in units vary from month to month.The company's variable costs per unit and total fixed costs have been constant from month to month.
Learning Objectives
- Grasp the essentials of absorption costing and the methodology for computing it.
- Estimate and interpret the net operating income through variable and absorption costing methods.