Colorado Company Provided the Following Information Regarding Its Only Product--Ice

question 136

Multiple Choice

Colorado Company provided the following information regarding its only product--ice skates. $$\begin{array}{l}\begin{array} { l r } \text { Direct materials used } & \$ 200,000 \\\text { Direct labor } & 80,000 \\\text { Fixed overhead } & 100,000 \\\text { Fixed selling and administrative costs } & 220,000 \\\text { Variable overhead } & 20,000 \\\text { Variable selling and administrative } & 75,000 \\\text { Selling unit price } & 84\\\\\text { Units produced and sold } &10,000\end{array}\\\end{array}$$ _____ is the manufacturing cost per unit if the absorption approach is used.

• A)$28
• B)$30
• C)$36
• D)$40

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Definitions:

Merchant

An individual or entity engaging in the selling of goods or services professionally or commercially.

UCC

Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States, intended to standardize and simplify the law.

Legal Sufficiency

The measure of whether a legal document or action meets the minimum requirements of the law to be enforceable.

Bilateral Contract

An agreement where each of the two parties makes a promise or set of promises to the other, creating mutual obligations.