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

question 88

Multiple Choice

Farron Company, which has only one product, has provided the following data concerning its most recent month of operations: $\begin{array}{|l|r|}\hline \text { Selling price } & \$ 92 \\\hline \text { Units in beginning inventory } & 0 \\\hline \text { Units produced } & 8,700 \\\hline \text { Units sold } & 8,300 \\\hline \text { Units in ending inventory } & 400 \\\hline \text { Variable costs per unit: } & \\\hline \text { Direct materials } & \$ 13 \\\hline \text { Direct labour } & \$ 55 \\\hline \text { Variable manufacturing overhead } & \$ 1 \\\hline \text { Variable selling and administrative } & \$ 5 \\\hline \text { Fixed costs: } & \\\hline \text { Fixed manufacturing overhead } & \$ 130,500 \\\hline \text { Fixed selling and administrative } & \$ 8,300 \\\hline\end{array}$
-What was the unit product cost for the month under absorption costing?

• A) $69.
• B) $74.
• C) $84.
• D) $89.

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Definitions:

Tire Pressures

The amount of air pressure in tires, critical for optimal vehicle performance and safety.

Overload

A condition where the current flowing through an electrical circuit exceeds the designed capacity, potentially causing damage or failure.

Footprint

The critical contact interface between a tire and the road surface it contacts. Also used to describe the ground uplink/downlink geographic signal area of a satellite communications system; for instance, a truck can move through multiple communication footprints on a cross-continental trip.

Premature Wear

Excessive and early degradation of a component or system, occurring before expected wear out.