Labadie Corporation Manufactures and Sells One Product

question 254

Multiple Choice

Labadie 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 25,000 units and sold 22,000 units. The company's only product is sold for $251 per unit.Assume that the company uses a variable costing system that assigns $23 of direct labor cost to each unit that is produced. The unit product cost under this costing system is:

• A) $181 per unit
• B) $117 per unit
• C) $94 per unit
• D) $215 per unit

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Definitions:

Mental Shortcuts

Cognitive strategies or simplified processes used to make decisions or judgments quickly, also known as heuristics.

Heuristic Processing

A mental shortcut that allows individuals to make decisions and solve problems quickly and efficiently, based on automatic, intuitive judgments.

Life Stages Hypothesis

A theory suggesting that individuals' preferences, behaviors, and attitudes change as they pass through different stages of their life.

Susceptibility

Refers to the likelihood or predisposition of an individual to be affected or influenced by certain external factors or conditions.