A Company Has the Following Information for Its First Month

question 57

Multiple Choice

A company has the following information for its first month of operations: $\begin{array}{ll}\text { Raw materials used } & \$ 25,000 \\\text { Sales (\$65 per unit) } & \$ 78,000 \\\text { Directlabor } &\$ 42,000\\\text { Variable factory overhead }&\$17,000\\\text { Fixed factory overheadunknown Variable sellingand }\\\text { administrative }&\$3,000\\\text { Fixed sellingand administrative }&\$5,000\\\text { Gross profit }&\$30,000\\\text { Contributionmargin }&\text { unknown }\\\end{array}$

Ending inventories:
Raw materials $\$ 7,000$
WIP none
Finishedgoods $\quad$$\quad$ 1,200 units The cost of goods sold under variable costing is:

• A) $96,000
• B) $84,000
• C) $42,000
• D) $48,000

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Definitions:

Technology Changes

The process of innovation and improvement in technology, affecting productivity, efficiency, and society's overall way of life.

Depression Phase

An economic downturn marked by a long period of decline in GDP, high unemployment, falling prices, and reduced levels of trade and investment.

Unemployment Rate

The percentage of workers who are jobless and actively seeking positions.

Economic Indicators

Statistics about economic activities that allow analysis of economic performance and predictions of future performance.