Penn Company Has the Following Data About Its Only Product

question 27

Multiple Choice

Penn Company has the following data about its only product: Penn Company uses the absorption approach.What is the gross margin?

• A)$300,000
• B)$390,000
• C)$450,000
• D)$470,000

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Definitions:

Merchandise

Products or goods that are bought and sold by businesses.

Discount Period

The time frame in which a discount is available for early payment of an invoice.

Implied Annual Interest Rate

The interest rate not explicitly stated but inferred from the terms of a financial instrument over a one-year period.

Invoice Price

The initial price listed by the manufacturer or supplier on the invoice, before any discounts, allowances, or additional charges are applied.