Pennsylvania Company Provided the Following Information Regarding Its Only Product--Skateboards

question 90

Multiple Choice

Pennsylvania Company provided the following information regarding its only product--skateboards. $$\begin{array} { l r } \text { Direct materials used } & \$ 200,000 \\\text { Direct labor } & 80,000 \\\text { Fixed overhead } & 100,000 \\\text { Fixed selling and administrative costs } & 190,000 \\\text { Variable overhead } & 20,000 \\\text { Variable selling and administrative } & 90,000 \\\text { Selling unit price } & 70 \\\\\text { Units produced and sold } &10,000 \\\end{array}$$ _____ is the gross margin if the absorption approach is used.

• A)$300,000
• B)$390,000
• C)$470,000
• D)$450,000

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Definitions:

Credit Balance

A situation in an account where the total credits exceed the total debits, indicating a positive balance.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor.

Journal Entry

A record in accounting that notes the details of a financial transaction in the ledger.

Organization Chart

A visual representation that shows the hierarchical structure of an organization and the relationships and relative ranks of its parts and positions/jobs.