McCann Mechanics, Compiled the Following Information for the Current Year

question 104

Multiple Choice

McCann Mechanics, compiled the following information for the current year: $\begin{array} { | l | r | } \hline \text { Variable manufacturing cost } & \$ 35 \\\hline \text { Fixed manufacturing cost } & 30 \\\hline \text { Variable selling and administrative } & 40 \\\text { cost } & \\\hline \text { Fixed selling and administrative cost } & 16 \\\hline\end{array}$ Which of the following choices correctly depicts the per-unit cost of inventory under variable costing and absorption costing?

• A)Variable, $35; absorption, $65.
• B)Variable, $35; absorption, $81.
• C)Variable, $105; absorption, $105.
• D)Variable, $105; absorption, $81.
• E)Variable $35; absorption $105.

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Definitions:

Share Capital

The total amount of funds raised by a company through the issuance of shares to investors, representing ownership in the company.

Shareholders' Equity

It represents the net assets of a company, calculated as total assets minus total liabilities, and is the ownership interest of the shareholders.

Goodwill Element

The portion of the purchase price in a business combination that exceeds the fair value of the net identifiable assets of the acquired entity, representing intangible assets like brand reputation or customer relationships.

Dividend Paid

Cash or stock distributed by a company to its shareholders from its profits or reserves as a return on investment.