Data from Rannier Metals for 2014 Is as Follows The Company Produced 145,000 Units During the Year and Sold

question 59

Multiple Choice

Data from Rannier Metals for 2014 is as follows: $\begin{array}{lr}\text { Sales } & \$ 20 \text { per unit } \\\text { Variable cost of goods sold } & ? ? \\\text { Fixed manufacturing overhead } & \$ 85,000 \\\text { Variable selling \& admini strative costs } & ? ? \\\text { Fixed selling \& administrative costs } & \$ 150,000\end{array}$ The company produced 145,000 units during the year and sold 130,000 units. Variable production costs per unit and fixed costs have remained constant all year. Net income for the year was $1,000,000. How much was the company's contribution margin?

• A) $765,000
• B) $1,235,000
• C) $1,365,000
• D) Not enough information is provided to determine the answer

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Definitions:

Upstream Costs

Expenses incurred in the early stages of a product's life cycle, such as exploration and development costs in the oil and gas industry.

Downstream Costs

Costs incurred after the production process, including distribution, marketing, and customer service expenses.

Business Process Re-engineering

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance such as cost, quality, service, and speed.

Work Flow

Work Flow is the sequence of processes through which a piece of work passes from initiation to completion, often in a business or manufacturing context.