Aaker 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)$3, 900
B)$(14, 100)
C)$12, 000
D)$8, 100

Question

Aaker 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)$3, 900 
B)$(14, 100) 
C)$12, 000 
D)$8, 100

Quizplus · Accepted Answer

Under absorption costing, net operating income can be calculated as:
Sales - Cost of goods sold (including fixed manufacturing overhead) - Selling and administrative expenses = Net operating income
Using the provided data, we can calculate net operating income as:
$60,000 - ($24,000 + ($6.50 × 10,000) + ($3,000 + $6,000)) = $12,000. 
Therefore, the correct answer is C.

Aaker Corporation, Which Has Only One Product, Has Provided the Following