Allen, Inc

question 72

Multiple Choice

Allen, Inc. has the following disbursements: * Variable manufacturing costs are $3 per unit. They are paid 40% in the month of purchase and 60% in the following month. Purchases are made in the month of production.
* Fixed overhead is $2,000, including $500 depreciation. Overhead costs are paid as incurred.
* Selling costs are $1,500 per month plus $1 per unit sold and are paid in the month incurred.
* Production for January, February, and March was 3,000, 2,000, and 1,200 units, respectively.
* Sales for the 3 months were 1,000, 2,500, and 1,000 units, respectively.
What is the amount of cash disbursements for February?

• A) $13,300
• B) $12,300
• C) $12,800
• D) $ 7,400

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Definitions:

Disinfectant

A chemical agent used to destroy harmful microbes or pathogens on inanimate objects and surfaces, promoting hygiene and preventing disease spread.

Household Bleach

A common household chemical used for whitening fabrics and disinfecting surfaces, typically based on a solution of sodium hypochlorite.

Sharps Containers

Specially designed containers used for the safe disposal of sharp medical instruments such as needles, blades, and lancets, to prevent injury and infection.

Global Harmonized System

A worldwide initiative to promote standard criteria for classifying and labeling chemicals according to their health, physical, and environmental hazards.