A Company Produces Toy Airplanes at a Variable Cost of $23

question 160

Multiple Choice

A company produces toy airplanes at a variable cost of $23 per toy.If 7,000 toys are produced at a total variable cost of $161,000,the total variable cost at 4,500 toys will be

• A)$161,000.
• B)$23.
• C)$103,500.
• D)$264,500.

---

Definitions:

Net Income

The final amount a company earns, following the deduction of all expenditures and taxes from its total revenue.

Ending Inventory

The cost of inventory on hand for selling at the conclusion of an accounting cycle.

Consignment

A business arrangement wherein goods are left in the possession of an authorized third party to sell, but ownership remains with the supplier until items are sold.

Ending Inventory

The total value of all inventory held by a company at the end of an accounting period.