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.

---

Definitions:

Organizational Strengths

The attributes and capabilities that give an organization a competitive edge in the market.

Environmental Opportunities

External factors or situations in the business environment that a company could exploit to its advantage.

Vertical Integration

A growth strategy to expand by acquiring upstream suppliers or downstream distributors.

Suppliers

Businesses or individuals that provide goods or services to another entity under terms specified in a contract.