Richardson Company The Following Information Is Available for Richardson Company for Its

question 107

Multiple Choice

Richardson Company
The following information is available for Richardson Company for its first year of operations:

• A)$120,000
• B)$64,500
• C)$27,000
• D)$24,000

Sales in units	5,000
Production in units	8,000
Manufacturing costs:
Direct labor	$3 per unit
Direct material	$5 per unit
Variable overhead	$1 per unit
Fixed overhead	$100,000
Net income (absorption method)	$30,000
Sales price per unit	$40

Refer to Richardson Company.If Richardson Company were using variable costing,what would it show as the value of ending inventory?

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Definitions:

Markdown

A reduction from the original selling price of products or services, often used to clear inventory or boost sales.

Liquidity Reduction

A decrease in the ease with which assets can be converted into cash without significant loss in value.

Cost of Goods Sold

An accounting term representing the direct expenses related to producing or purchasing the goods sold by a company during a given period.

Amortization

The process of gradually paying off debt over a period of time through scheduled, pre-determined payments.