A company produces and sells popular t-shirts. Following is information about its t-shirts for 2020:...
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Accounting
A company produces and sells popular t-shirts. Following is information about its t-shirts for 2020:
Selling price $15.00 per t-shirt
Variable costs:
Production (manufacturing costs) $3.00 per t-shirt
Selling & administration $1.00 per t-shirt
Fixed costs:
Production (manufacturing costs) $1,000,000 per year
Selling & administration $2,000,000 per year
During 2020, the company produced 400,000 t-shirts and sold 350,000 of them. Assume that there was no beginning inventory. How much is the net income under full costing?
a) $850,000
b) $3,150,000
c) $2,250,000
d) $975,000
e) $1,400,000
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