In Its First Year of Operations, a Company Has Sales

question 55

Multiple Choice

In its first year of operations, a company has sales of $162,000, ending finished goods inventory of $9,000, variable manufacturing costs of $55,000, and fixed manufacturing costs of $32,000 for the year. The company pays 12% commission to its sales force and has fixed selling and administrative expenses of $25,000 annually. The company has no other variable expenses.
Assuming the company uses direct costing, the contribution margin for the year is

• A)$96,560.
• B)$87,560.
• C)$71,560.
• D)$107,000.

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Definitions:

Arterial Blood Gases

A test that measures the levels of oxygen and carbon dioxide in arterial blood, used to assess lung function and acid-base balance.

Respiratory Acidosis

A medical condition characterized by decreased acidity in the blood and other body fluids due to the accumulation of carbon dioxide as a result of impaired lung function.

Metabolic Acidosis

A condition where the body produces excessive acid, or the kidneys are not removing enough acid from the body, leading to a decrease in blood pH.

Anthracosis

The accumulation of carbon deposits in the lungs due to inhalation of smoke or coal dust, often associated with black lung disease.