Aces inc., a manufacturer of tennis rackets, began operations this year. the company produced 5,300 rackets and sold 4,200. each racket was sold at a price of $83. fixed overhead costs are $65,190, and fixed selling and administrative costs are $64,500. the company also reports the following per unit variable costs for the year: variable product costs $24.38variable selling and administrative expenses $1.38 prepare an income statement under absorption costing.

Net operating profit= $124,248

Explanation:

Giving the following information:

The company produced 5,300 rackets and sold 4,200.

Each racket was sold for $83.

Fixed overhead costs are $65,190

Fixed selling and administrative costs are $64,500.

The company also reports the following per unit variable costs for the year:

Variable product costs $24.38

Variable selling and administrative expenses $1.38

Under absorption costing the fixed overhead is included in the product costs.

Unitary fixed overhead= 65190/5300= $12.3

Cost of goods sold= 4200*(24.38 + 12.3)= 154,056

Income statement:

Sales= 4200*83= $348,600

COGS= 154,056

Gross profit= 194,544

Selling and administrative expense= 64500 + (4200*1.38)= $70296

Net operating profit= $124,248

The correct answer is E) positive externality.

The economic concept that is applied in this statement is "positive externality."

The statement is: In other words, you are not only protecting your own child by getting her vaccinated, but you are also protecting other children—and adults too.

When we are talking about economics, the term "positive externality" is applied when some else is receiving a benefit from a transaction between two parties. In this case of the vaccine, you benefit your children and because they will be protected against infections, they are not going to transmit the infection to other children, That would be the "positive externality."