Grover Company Has the Following Data for the Production and Sale

question 28

Multiple Choice

Grover Company has the following data for the production and sale of 2,000 units.
$$\begin{array} { l l r } \text { Sales price per unit } & \$ \text { 800per unit } \\\text { Fixed costs: } & & \\\text { Marketing and adrinistrative } & \$ 400,000 \text { per period } \\\text { Marufacturing overhead } & \$ 200,000 \text { per period } \\\text { Variable costs: } & & \\\text { Marketing and adrinistrative } & \$ 50 \text { per unit } \\\text { Marnufacturing overhead } & \$ 80 \text { per unit } \\\text { Direct labor } & \$ 100 \text { perunit } \\\text { Direct Materials } & \$ 200 \text { per unit }\end{array}$$

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What is the prime cost per unit?

• A) $100
• B) $280
• C) $300
• D) $480

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Definitions:

Units Produced

The total quantity of units manufactured by a company during a specific period.

Relevant Range

The relevant range refers to the span of activity or volume within which the assumptions about cost behavior hold true.

Fixed Range

A predefined interval within which an operational value (such as inventory levels) is maintained.

High-Low Method

A method applied within cost accounting that determines variable and fixed costs by examining the extremes of activity levels.