Robertson Company, Which Began Business at the Start of 2012

question 35

Multiple Choice

Robertson Company, which began business at the start of 2012, had the following data: Planned and actual production: 40,000 units
Sales: 37,000 units at $15 per unit
Production costs: Variable, $4 per unit; Fixed, $260,000
Selling and administrative costs: Variable $1 per unit; Fixed $32,000
The gross margin that Robertson would disclose on its 2012 absorption-costing income statement is:

• A)$97,500.
• B)$147,000.
• C)$166,500.
• D)$370,000.
• E)$403,500.

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Definitions:

Shelf Life

The time period during which a product, such as food or medicine, remains safe and effective to use.

Calorie

A unit for measuring the heat value of food.

Heat Value

The amount of heat produced by the complete combustion of a given substance, often measured in Joules per kilogram (J/kg) or British Thermal Units (BTU).

Food

any nutritious substance that people or animals eat or drink to maintain life and growth.