Sweet Cocoa Produces Chocolate Syrup Used by Candy Companies

question 77

Multiple Choice

Sweet Cocoa produces chocolate syrup used by candy companies.Recently, the company has had excess capacity due to a foreign supplier entering its market.Sweet Cocoa is currently bidding on a potential order from Kilwin's Candy for 5,000 cases of syrup.The estimated cost of each case is $27.50, as follows: direct material, $10; direct labor, $5; and manufacturing overhead, $12.50.The overhead rate of $2.50 per direct labor dollar is based on estimated annual overhead of $1,500,000 and estimated direct labor cost of $600,000, composed 40% of variable costs and 60% of fixed costs.The largest fixed cost relates to depreciation of plant and equipment.How much is the variable cost of producing a case of chocolate syrup?

• A)$16.00
• B)$27.50
• C)$11.00
• D)$20.00

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Definitions:

Implicit Association Test

A psychological assessment tool designed to uncover unconscious or hidden biases and attitudes by measuring the strength of associations between concepts.

Amygdala

A part of the brain involved in the processing of emotions, including fear, pleasure, and anger.

Implicit Association Test

A psychological test designed to reveal underlying attitudes or biases by measuring the speed of people’s associations between concepts.

Amygdala

A part of the brain's limbic system involved in emotion, particularly in the processing of fear-related stimuli.