Brady Company Provided the Following Information Regarding Its One and Only

question 53

Multiple Choice

Brady Company provided the following information regarding its one and only product -skateboards. $\begin{array}{ll}\text { Direct materials used } & \$ 200,000 \\\text { Direct labor } & 180,000 \\\text { Fixed overhead } & 100,000 \\\text { Fixed selling and adminis trative costs } & 150,000 \\\text { Variable overhead } & 120,000 \\\text { Variable selling and administrative } & 60,000 \\\text { Selling unit price } & 75 \\\text { Units produced and sold } & 10,000\end{array}$ is the difference in total product cost between the absorption approach and the contribution approach.

• A) $150,000
• B) $100,000
• C) $120,000
• D) None of these answers is correct.

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Definitions:

Actual Production

The total quantity of goods or services produced by a company during a specific period, measured to assess operational efficiency and effectiveness.

Direct Labor Cost

The total cost of all labor that is directly involved in the production of goods or services.

Manufacturing Overhead

The indirect factory-related costs that are incurred when producing a product.

Total Manufacturing Costs

The sum of all expenses directly associated with the production of goods, including direct labor, direct materials, and manufacturing overhead.