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2. Adam Company has the following cost structure for Year 1: Variable Costs: Manufacturing $6 per unit produced | Selling and Administrative $2 per unit
2. Adam Company has the following cost structure for Year 1: Variable Costs: Manufacturing $6 per unit produced | Selling and Administrative $2 per unit produced Fixed Costs Manufacturing $250,000 per year Selling and Administrative $120,000 per year During Year 1, 100,000 units were produced and 95,000 units were sold. There was no beginning inventory. The selling price was $14 per unit. What is operating income for Year 1 using absorption costing? a) $200,000 b) $212,500 c) $202,500 d) $190,000
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