Ross Corporation Produces a Single Product

question 284

Multiple Choice

Ross Corporation produces a single product. The company has direct materials costs of $8 per unit, direct labor costs of $6 per unit, and manufacturing overhead of $10 per unit. Sixty percent of the manufacturing overhead is for fixed costs. In addition, variable selling and administrative expenses are $2 per unit, and fixed selling and administrative expenses are $3 per unit at the current activity level. Assume that direct labor is a variable cost.Under variable costing, the unit product cost is:

• A) $24 per unit
• B) $20 per unit
• C) $18 per unit
• D) $21 per unit

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Definitions:

Core Value

A fundamental belief or principle that is considered inherently important by an organization, guiding its behavior and actions.

Sales Revenue

The sum of all revenue generated from selling products or services prior to deducting any costs.

Market Share

The percentage of an industry's sales that a particular company controls.

Profit

The financial gain made in a transaction or operation, calculated as the difference between the sales revenue and the cost of goods sold.