Use the Following Information for Items

question 6

Multiple Choice

Use the following information for items
Obama Company sells its product for $25 per unit.During 2020, it produced 20,000 units and sold 15,000 units (there was no beginning inventory) .Costs per unit are: direct materials $5, direct labour $4, and variable overhead $3.Fixed costs are: $300,000 manufacturing overhead, and $50,000 selling and administrative expenses.
-Ending inventory under variable costing is

• A)$60,000.
• B)$240,000.
• C)$360,000.
• D)$410,000.

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Definitions:

Supply Curve

A graph showing the relationship between the price of a good and the amount of it that suppliers are willing to produce and sell, typically upward sloping.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing the additional benefit or surplus enjoyed by producers due to market conditions.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the economic benefit to consumers.

Ryan Reynolds

A Canadian actor, producer, and entrepreneur known for his performance in various films and co-owner of Aviation American Gin.