Wilson Company Reported the Following Information About the Production and Sales

question 79

Multiple Choice

Wilson Company reported the following information about the production and sales of its only product during its first month of operations: $$\begin{array} { l l } \text { Sales ( } \$ 225 \text { per unit) } & \$ 360,000 \\\text { Direct materials used } & \$ 176,000 \\\text { Direct labor } & \$ 100,000 \\\text { Variable factory overhead } & \$ 44,000 \\\text { Fixed factory overhead } & \$ 80,000 \\\text { Variable selling and administrative } & \$ 20,000 \\\text { expenses } & \\\text { Fixed s elling and administrative expenses } & \$ 10,000 \\\text { Endinginventories: Direct materials } & - 0 - \\\text { WIP } & - 0 -\\\text { Finished goods }&400 \text { units }\end{array}$$ The gross profit under absorption costing is:

• A) $40,000
• B) $0
• C) $104,000
• D) $84,000

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Definitions:

LCD Televisions

Televisions that use Liquid Crystal Display technology for their screens, offering slim profiles and energy-efficient performance.

OLED Televisions

OLED Televisions use Organic Light Emitting Diode technology for their displays, offering enhanced image quality through high contrast ratios, deep blacks, and a wide color range.

Underallocation

Refers to the situation where resources are not distributed or utilized efficiently, leading to potential shortages or unmet demand in certain areas.

Technology

The application of scientific knowledge for practical purposes, especially in industry and the economy.