Jarmon Company, 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.
-What is the net operating income for the month under absorption costing?
A) $4,500
B) $12,800
C) $25,500
D) $10,900

Question

Jarmon Company, 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.
-What is the net operating income for the month under absorption costing?
A) $4,500 
B) $12,800 
C) $25,500 
D) $10,900

Quizplus · Accepted Answer

Absorption costing includes fixed manufacturing overhead costs as product costs. The net operating income under absorption costing is $25,500 - $14,600 = $10,900.

Jarmon Company, Which Has Only One Product, Has Provided the Following