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A manufacturing company that produces a single 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) $11,900
B) $(20,200)
C) $14,600
D) $2,700
Absorption Costing
An evaluation technique that assimilates all production costs, covering direct materials, direct labor, and variable and fixed overheads, into the price of a product.
Net Operating Income
An indicator of a firm's profitability from standard operations, excluding non-operational income and expenses like taxes and interest.
Operations
The activities involved in running a business, production, or system effectively and efficiently.
- Get an understanding of how absorption costing contrasts with variable costing and their influence on net operating income.
- Calculate the net operating earnings by leveraging absorption and variable costing strategies.
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Learning Objectives
- Get an understanding of how absorption costing contrasts with variable costing and their influence on net operating income.
- Calculate the net operating earnings by leveraging absorption and variable costing strategies.
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