Last Year, Fabre Company Produced 20,000 Units and Sold 18,000

question 36

Multiple Choice

Last year, Fabre Company produced 20,000 units and sold 18,000 units at a price of $12. Costs for last year were as follows:
Fixed factory overhead is applied based on expected production. Last year, Fabre expected to produce 20,000 units.
-Refer to Figure 8-1. Assuming that beginning inventory was zero, what is the value of ending inventory under variable costing?

• A) $3,300
• B) $2,500
• C) $5,000
• D) $3,720
• E) $7,200

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Definitions:

Unrealistic Expectations

Expectations that are unreasonable or unattainable given the current circumstances or resources available.

Utmost Quality

The highest standard or level of excellence that a product, service, or process can achieve.

Perceived Quality

The subjective assessment by consumers of a product's overall excellence or superiority, which may differ from its actual technical quality.

Group Setting

A social or work environment in which activities, discussions, or tasks are performed collaboratively in a group.