Chairry's is a direct marketer of popular music. The following information about its revenue and cost structure is available: Selling Price: $13.00 per CD Variable Costs: Production: $3.00 per CD Selling and Administration: $ 1.00 per CD Fixed Costs: Production: $1,000,000 per year Selling and Administration: $3,000,000 per year Assume that 500,000 CDs are produced, and 450,000 are sold in 2008. What is income under Full Costing? A $50,000 B $500,000 C $150,000 D $1,850,000

Cornerstones of Cost Management (Cornerstones Series)
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Author:Don R. Hansen, Maryanne M. Mowen
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Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
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Chairry's is a direct marketer of popular music. The following information about its
revenue and cost structure is available:
Selling Price: $13.00 per CD
Variable Costs:
Production: $3.00 per CD
Selling and Administration: $ 1.00 per CD
Fixed Costs:
Production: $1,000,000 per year
Selling and Administration: $3,000,000 per year
Assume that 500,000 CDs are produced, and 450,000 are sold in 2008. What is
income under Full Costing?
A $50,000
B $500,000
C $150,000
D $1,850,000
Transcribed Image Text:Chairry's is a direct marketer of popular music. The following information about its revenue and cost structure is available: Selling Price: $13.00 per CD Variable Costs: Production: $3.00 per CD Selling and Administration: $ 1.00 per CD Fixed Costs: Production: $1,000,000 per year Selling and Administration: $3,000,000 per year Assume that 500,000 CDs are produced, and 450,000 are sold in 2008. What is income under Full Costing? A $50,000 B $500,000 C $150,000 D $1,850,000
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