Which statement best describes the circular flow of an economy? the flow between businesses and resources

the exchange of money, goods, and services in an economy

a circular flow happens only in a resource market

a circular flow happens only in a goods and services market

The operating income for May under absorption costing is $325,000

Explanation:

For computing the operating income under absorption costing, the calculation is shown below

Sales - Cost of good sold = Gross Profit

Gross Profit - Selling & Admin Expenses = Net income

By following these two equations we can easily compute net income

First we compute the gross profit

where,

Sales is $900,000

And cost of good sold = Fixed cost of goods sold + Variable cost of goods sold  

So, cost of good sold = $100,000 + $250,000 = $350,000

Thus, the Gross profit is $900,000 - $350,000  = $550,000

Now, after computing the gross profit, the selling and admin expenses of variable and fixed should be deducted from gross profit

So,

= $550,000 - $100,000 - $125,000

= $325,000

Hence, the operating income for May under absorption costing is $325,000