ABC Company estimates the following data for the coming month Total variable cos
ID: 2595949 • Letter: A
Question
ABC Company estimates the following data for the coming month
Total variable costs
$40,000.00
Income tax rate
40%
Contribution margin percentage
30%
Estimated net income
$6,000.00
Find the estimated operating income for the coming month.
Between 0 and $9,999.00
Between $9,999.00 and $19,999.00
Between $20,001.00 and $30,000.00
Between $30,000 and 40,001.00
The conversion costs are
total costs
variable costs
direct labor and overhead
direct material and direct labor
ABC Company estimates the following data for the coming month
Total variable costs
$40,000.00
Income tax rate
40%
Contribution margin percentage
30%
Estimated net income
$6,000.00
Find the estimated operating income for the coming month.
a.Between 0 and $9,999.00
b.Between $9,999.00 and $19,999.00
c.Between $20,001.00 and $30,000.00
d.Between $30,000 and 40,001.00
The conversion costs are
a.total costs
b.variable costs
c.direct labor and overhead
d.direct material and direct labor
Explanation / Answer
Estimated operating income = 6000/(1-0.4)= 10000 Option B Between $9,999.00 and $19,999.00 is correct 2 The conversion costs are direct labor and overhead