Tremble Corporation Manufactures and Sells One Product

question 194

Multiple Choice

Tremble Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 68,000 units and sold 65,600 units. The company's only product is sold for $278 per unit.Assume that the company uses an absorption costing system that assigns $17 of direct labor cost and $60 of fixed manufacturing overhead to each unit that is produced. The unit product cost under this costing system is:

• A) $106 per unit
• B) $183 per unit
• C) $123 per unit
• D) $254 per unit

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Definitions:

Antitrust Cases

Legal disputes focused on stopping or managing businesses that violate competition laws designed to promote market fairness and prevent monopolies.

Herfindahl Index

A measure of market concentration and competition, calculated as the sum of the squares of the market shares of all firms within an industry.

Clayton Act

A U.S. antitrust law enacted in 1914 aimed at promoting fair competition and preventing monopolies.

Herfindahl Index

A measure of the size of firms in relation to the industry and an indicator of the amount of competition among them.