Assume that a company maintains no beginning inventory. It produced 4,000 units and sold 3,800 units of only one product for a price of $130 per unit. Its unit product cost under absorption costing includes variable manufacturing costs per unit are $80 and its fixed manufacturing overhead per unit is $24. Its variable selling and administrative expense is $12 per unit and its fixed selling and administrative expense is $45,000. Which of the following statements is true? A. Its absorption costing net operating income will be $2,400 less than its variable costing net operating income.
B. Its absorption costing net operating income will be $2,400 greater than its variable costing net operating income.
C. Its absorption costing net operating income will be $4,800 less than its variable costing net operating income.
D. Its absorption costing net operating income will be $4,800 greater than its variable costing net operating income.

Aprice ceiling is “binding” if the price ceiling is set below the equilibrium price. suppose that the equilibrium price is $5. if a price ceiling is set at $6, this will not affect the market in any way since $5 remains a legally allowable price (since $5 < $6). a price ceiling of $6 is called a “non-binding” price ceiling. on the other hand, if the price ceiling is set at $4, the price ceiling is “binding” because the natural equilibrium price is $5 but that is no longer allowed. what happens when there is a binding price ceiling? at a price below the equilibrium price, quantity demanded exceeds quantity supplied. there is a shortage. normally, price increases eliminate shortages by increasing quantity supplied and decreasing quantity demanded. in this case, however, price increases are not allowed past the price ceiling. we therefore predict that the observed market price will be right at the price ceiling and there will be a permanent shortage. the observed quantity bought and sold will be dictated by the quantity supplied at the price ceiling. although consumers would like to buy more, there are no more units for sale

You are chairman of the board of a successful technology firm. there is a nominal federal corporate tax rate of 35 percent, yet the effective tax rate of the typical corporation is about 12.6%. your firm has been clever with use of transfer pricing and keeping money abroad and has barely paid any taxes over the last 5 years; during this same time period, profits were $28 billion. one member of the board feels that it is un-american to use various accounting strategies in order to avoid paying taxes. others feel that these are legal loopholes and corporations have a fiduciary responsibility to minimize taxes. one board member quoted what the ceo of exxon once said: “i’m not a u. s. company and i don’t make decisions based on what’s good for the u. s.” what are the alternatives? what are your recommendations? why do you recommend this course of action?

In each of the following cases, find the unknown variable. ignore taxes. (do not round intermediate calculations and round your answers to the nearest whole number, e. g., 32.) accounting unit price unit variable cost fixed costs depreciation break-even 20,500 $ 44 $ 24 $ 275,000 $ 133,500 44 4,400,000 940,000 8,000 75 320,000 80,000