Aaker Company, Which Has Only One Product, Has Provided the Following

question 143

Multiple Choice

Aaker Company, which has only one product, has provided the following data concerning its most recent month of operations:
$\begin{array} { | l | r | } \hline \text { Selling price } & \$ 99 \\\hline \text { Units in beginning inventory } & 0 \\\hline \text { Units produced } & 6,300 \\\hline \text { Units sold } & 6,000 \\\hline \text { Units in ending inventory } & 300 \\\hline \text { Variable costs per unit: } & \\\hline \text { Direct materials } & \$ 12 \\\hline \text { Direct labour } & \$ 42 \\\hline \text { Variable manufacturing overhead } & \$ 6 \\\hline \text { Variable selling and administrative } & \$ 6 \\\hline \text { Fixed costs: } & \\\hline \text { Fixed manufacturing overhead } & \$ 170,100 \\\hline \text { Fixed selling and administrative } & \$ 24,000 \\\hline\end{array}$



-What is the total period cost for the month under the absorption costing approach?

• A) $24,000.
• B) $60,000.
• C) $170,100.
• D) $230,100.

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Definitions:

Credit Sales

Sales transactions where the payment is deferred to a future date, typically documented with an invoice.

Uncollectible

Refers to accounts receivable or other debts that are considered unlikely to be collected and may be written off as a loss.

Cash Receipts

The total amount of money, including cash, checks, and credit card payments, received by a business during a specific period.

Authority and Responsibility

The granting of power to make decisions and the accountability that comes with those decisions within an organization.