A Company Has the Following Information for Its First Month

question 60

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 total contribution margin under variable costing is_____.

• A)$21,000
• B)$7,000
• C)$34,500
• D)$33,000

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Definitions:

Cognitive Comprehensiveness

A process in which team members examine critical issues with a wide lens and formulate strategies by considering diverse approaches, decision criteria, and courses of action.

Decision Criteria

The standards or benchmarks that guide the decision-making process, helping individuals or organizations to choose among alternatives.

Cofounders' Relationship

The professional and often personal relationship between the individuals who establish a business together.

Emotional Commitment

A personal investment and engagement in certain values, goals, or relationships, often resulting in a stronger dedication to them.