The Following Monthly Data Are Available for Seasons Company Which

question 10

Multiple Choice

The following monthly data are available for Seasons Company which produces only one product: Selling price per unit $42; Unit variable expenses $14; Total fixed expenses $42000; Actual sales for the month of June 4000 units. How much is the margin of safety for the company for June?

• A) $70000
• B) $105000
• C) $63000
• D) $2500

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Definitions:

Activity-Based Costing

A costing methodology that assigns costs to products and services based on the activities required to produce them.

Overhead Costs

Indirect costs of running a business that are not directly attributable to a specific product or service, such as rent, utilities, and administrative expenses.

Cost Drivers

Factors that cause the cost of a product or service to change.

Single Plantwide Overhead Rate

A method in cost accounting where a single rate is used to allocate all of a plant's manufacturing overhead costs to its products.