Sol Enterprises' Contribution Income Statement Utilizing Variable Costing Appears Below

question 99

Multiple Choice

Sol Enterprises' contribution income statement utilizing variable costing appears below: Sol Enterprises
Income Statement
For the Year ended December 31, 2014
$\begin{array}{ll}\text { Sales (\$12 per unit) }&&\$240,000\\\text { Less variable costs: }\\\text { Cost of goods sold }&\$100,000\\\text { Selling \& administrative }&18,000&118,000\\\text { Contribution margin }&&122,000\\\text { Less fixed costs: }\\\text { Manufacturing overhead } & 60,900& \\\text { Selling \& administrative costs } & 15,000 & 75,900\\\text { Net income }&&\$46,100\end{array}$
Sol produced 21,000 units during the year. Variable costs per unit and fixed production costs have remained constant the entire year. There were no beginning inventories. How much is the dollar value of the ending inventory using variable costing?

• A) $5,000
• B) $7,900
• C) $8,800
• D) $2,900

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Definitions:

Concrete Operational

A stage in Piaget's theory of cognitive development where children gain the ability to think logically about concrete events.

Formal Operational

The stage in Piaget's theory of cognitive development during which people develop the ability to think about abstract concepts and logically test hypotheses.

Cognitive Capacities

The mental abilities or faculties related to the processing of information, perception, reasoning, and memory.

Piaget

A Swiss psychologist renowned for his groundbreaking work in child development, specifically his theory of cognitive development that outlines how children progress through four stages of mental development.