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:

Proprietorship

A form of business organization where a single individual owns the company and is responsible for its debts.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholder equity at a specific point in time, providing a snapshot of its financial condition.

Assets Section

Part of a balance sheet that lists and describes an entity's resources or items of value owned.

Merchandising Business

An enterprise that purchases finished goods for resale to generate profit, operating between the producers and end consumers.