Aaron Corporation, Which Has Only One Product, Has Provided the Following

question 188

Multiple Choice

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: The total gross margin for the month under the absorption costing approach is:

• A) $12,000
• B) $59,400
• C) $63,000
• D) $27,000

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Definitions:

Activity

Refers to any action or task performed within an organization that consumes resources.

Relevant Range

The range of activity over which a company expects its operating assumptions, such as cost behavior and sales mix, to remain valid, influencing budgeting and financial planning.

Fixed Costs

Costs that do not vary with the level of production or business activity, remaining constant even when output changes.

Variable Cost

Expenses that change in proportion to the activity or volume of business.