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:

Prosocial Motivation

The desire to benefit others or contribute to the welfare of a group or society.

Skill Variety

The opportunity to do a variety of job activities using various skills and talents.

Job Complexity

The degree to which a job requires a variety of different activities involving multiple skills and talents.

Skill Variety

The degree to which a job requires a range of different activities and skills to carry out the work.