A manufacturer reports the following information below for its first three years in operation.
-Income for year 2 using absorption costing is:
A)$109,000.
B)$117,000.
C)$106,600.
D)$115,000.
E)$111,000.

Question

A manufacturer reports the following information below for its first three years in operation.  
-Income for year 2 using absorption costing is:
A)$109,000. 
B)$117,000. 
C)$106,600. 
D)$115,000. 
E)$111,000.

Quizplus · Accepted Answer

Absorption costing includes all manufacturing costs, both fixed and variable, in the cost of a product. The income under absorption costing can be different from that under variable costing due to the treatment of fixed manufacturing overhead. Without specific details on production, sales, and costs, it's not possible to calculate or confirm the correct income figure directly. However, given the options provided and assuming C is the correct choice, it implies that the specific calculations based on the provided data (not given in the question) lead to an income of $106,600 under absorption costing.

A Manufacturer Reports the Following Information Below for Its First