Rylan Corporation Received an Offer from an Exporter for 25,000

question 46

Multiple Choice

Rylan Corporation received an offer from an exporter for 25,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: What is the amount of the income or loss from acceptance of the offer?

• A) $125,000 loss
• B) $25,000 income
• C) $125,000 income
• D) $25,000 loss

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Definitions:

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory value based on the average cost of all items available for sale during the period.

Equivalent Unit

A concept in cost accounting used to allocate costs to partially completed goods, equating them to an amount of finished goods.

Fabricating Department

A section within a manufacturing facility where raw materials are transformed into components or products through various processes like cutting, assembling, or molding.

Weighted Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all items available for sale.