Asked by Alyamamah Saleh on Jun 03, 2024
Verified
The net operating income (loss) under absorption costing in Year 2 is closest to:
A) $146,000
B) $118,000
C) $47,000
D) $41,000
Absorption Costing
A method in accounting that adds all the manufacturing-related expenses like direct materials, direct labor, and all types of overhead (both variable and fixed) to the cost of a product.
Net Operating Income
Profit generated from a company's core business operations, excluding costs and income from non-operational activities.
Operating Loss
A situation where a business's total expenses exceed its revenues, not accounting for interest or taxes.
- Calculate the profit from operations according to variable and absorption costing systems.
Verified Answer
Learning Objectives
- Calculate the profit from operations according to variable and absorption costing systems.
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