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During Its First Year of Operations,the McCormick Company Incurred the Following

Question 71

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During its first year of operations,the McCormick Company incurred the following manufacturing costs: Direct materials,$5 per unit,Direct labor,$3 per unit,Variable overhead,$4 per unit,and Fixed overhead,$250,000.The company produced 25,000 units,and sold 20,000 units,leaving 5,000 units in inventory at year-end.Income calculated under variable costing is determined to be $315,000.How much income is reported under absorption costing?


A) $315,000
B) $265,000
C) $565,000
D) $365,000
E) $290,000

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