If 130,000 Units Are Produced, Total Costs Are $333,000

question 94

Multiple Choice

If 130,000 units are produced, total costs are $333,000. Total fixed costs for Blue Peace Inc. are $145,000. The variable cost per unit is

• A)$3.68/unit.
• B)$1.12/unit.
• C)$2.56/unit.
• D)$1.45/unit.

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Definitions:

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction.

Current Liability

A company's debts or obligations that are due within one year, including accounts payable, short-term loans, and taxes payable.

Warranty Liability

The obligation a company assumes when it guarantees the condition of its product and agrees to repair or replace defective products.

FICA Taxes Payable

Liabilities owed by an employer to the federal government for Federal Insurance Contributions Act taxes, typically for Social Security and Medicare.