The Following Items Appeared on December 31 Excel Work Sheet

question 99

Multiple Choice

The following items appeared on December 31 Excel work sheet. Based on the following information, what is profit for the year?

• A) $1,725
• B) $1,855
• C) $2,060
• D) $4,125
• E) $4,670

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Definitions:

Absorption Costing

A method of accounting for costs in which all costs of manufacturing a product, including both fixed and variable costs, are considered product costs.

Variable Manufacturing Costs

Costs that vary directly with the level of production output, including materials, labor, and overhead expenses that change as production levels change.

Selling Price

The amount a seller charges for a product or service, determined by costs, market conditions, and competitive pricing.

Contribution Margin

The amount by which the sales price of a product exceeds its variable costs, used to cover fixed costs and generate profit.