Fit Apparel Company Reports the Following Data for Its First $$185,000
D)$675,000

question 19

Multiple Choice

Fit Apparel Company reports the following data for its first year of operation.

What are the total manufacturing costs to account for?

• A)$650,000
• B)$835,000
• C)$$185,000
• D)$675,000

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Definitions:

Variable Costing

An accounting method in which costs that vary directly with the level of production output are charged to product units.

Net Operating Income

The total profit of a company after operating expenses but before subtracting interest and taxes.

Direct Labor Cost

The cost associated with the work of employees who are directly involved in the manufacturing of products.

Absorption Costing

A method of inventory costing in which all costs of manufacturing are included in the cost of goods sold, including direct materials, direct labor, and both variable and fixed manufacturing overhead.