Williamson Corporation Acquired Two Inventory Items at a Lump-Sum Cost

question 90

Multiple Choice

Williamson Corporation acquired two inventory items at a lump-sum cost of $40,000.The acquisition included 3,000 units of product CF, and 7,000 units of product 3B.CF normally sells for $12 per unit, and 3B for $4 per unit.If Williamson sells 1,000 units of CF, what amount of gross profit should it recognize?

• A)$1,500.
• B)$4,500.
• C)$8,000.
• D)$9,500.

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Definitions:

Production Budget

A financial plan showing the number of units to be produced in a period to meet sales and inventory requirements.

Merchandise Purchases Budget

A detailed plan used by a merchandising company that shows the amount of goods that must be purchased from suppliers during the period.

Not-For-Profit Entities

Organizations that operate for purposes other than generating profit, often focusing on social, educational, or charitable activities.

Objectives

Specific, measurable goals set by a business or individual to guide activities and measure performance effectively.