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

question 50

Multiple Choice

Chown Company, which has only one product, has provided the following data concerning its most recent month of operations:
$\begin{array}{l|r|}\hline \text { Selling price } & \$ 110 \\\hline \text { Units in beginning inventory } & 0 \\\hline \text { Units produced } & 8,000 \\\hline \text { Units sold } & 7,800 \\\hline \text { Units in ending inventory } & 200 \\\hline \text { Variable costs per unit: } & \\\hline \text { Direct materials } & \$ 22 \\\hline \text { Direct labour } & \$ 31 \\\hline \text { Variable manufacturing overhead } & \$ 3 \\\hline \text { Variable selling and administrative } & \$ 4 \\\hline \text { Fixed costs: } & \\\hline \text { Fixed manufacturing overhead } & \$ 248,000 \\\hline \text { Fixed selling and administrative } & \$ 140,400 \\\hline\end{array}$

-What was the total gross margin for the month under the absorption costing approach?

• A) $7,800.
• B) $179,400.
• C) $196,800.
• D) $390,000.

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Definitions:

Test Statistic

A calculated value from sample data used to make decisions about hypotheses, typically measuring how far the sample evidence deviates from what is expected under the null hypothesis.

Normal Population

A population where the distribution of data points follows a normal (bell-shaped) distribution, characterized by a specific mean and standard deviation.

Confidence Interval

A range of values, derived from sample data, that are believed to contain the value of an unknown population parameter with a stated level of confidence.

Standard Deviation

A statistic that quantifies the variation or dispersion of a set of data points.