A Company Has the Following Information for Its First Month

question 92

Multiple Choice

A company has the following information for its first month of operations: $$\begin{array} { l r } \text { Raw materials used } & \$ 25,000 \\\text { Sales } \$ 65 \text { per unit) } & \$ 78,000 \\\text { Direct labor } & \$ 42,000 \\\text { Variable factory overhead } & \$ 17,000 \\\text { Fixed factory overhead } & \text { unknown } \\\text { Variable selling and administrative } & \$ 3,000 \\\text { Fixed selling and administrative } & \$ 5,000 \\\text { Gross profit } & \$ 30,000 \\\text { Contribution margin } & \text { unknown } \\\\\text { Ending inventories: }\\\\\text { Raw materials } & \$ 7,000 \\\text { WIP } & \text { none } \\\text { Finished goods } & 1,200 \text { units }\end{array}$$ The cost of goods sold under variable costing is_____.

• A)$42,000
• B)$96,000
• C)$48,000
• D)$84,000

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Definitions:

Proactive

Characterizes an approach that anticipates and initiates change rather than reacting to events.

Contingency Planning

The process of preparing strategies to address unexpected events or emergencies that could negatively impact operations.

Changing Circumstances

Refers to the varying conditions or situations that can affect an individual's or organization's decisions and actions.

Implemented

The act of carrying out a plan, policy, or method into action to achieve a given goal.