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

question 113

Multiple Choice

Gabbert Company, which has only one product, has provided the following data concerning its most recent month of operations:
$\begin{array}{|l|r|}\hline \text { Selling price } & \$ 90 \\\hline \text { Units in beginning inventory } & 0 \\\hline \text { Units produced } & 3,600 \\\hline \text { Units sold } & 3,400 \\\hline \text { Units in ending inventory } & 200 \\\hline \text { Variable costs per unit: } & \\\hline \text { Direct materials } & \$ 23 \\\hline \text { Direct labour } & \$ 11 \\\hline \text { Variable manufacturing overhead } & \$ 2 \\\hline \text { Variable selling and administrative } & \$ 8 \\\hline \text { Fixed costs: } & \\\hline \text { Fixed manufacturing overhead } & \$ 93,600 \\\hline \text { Fixed selling and administrative } & \$ 61,200 \\\hline\end{array}$

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

• A) $90,000.
• B) $95,200.
• C) $125,800.
• D) $156,400.

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Definitions:

Beet Fiber

A byproduct of sugar beet processing that is used as a dietary fiber supplement or in the production of biodegradable products.

Refined Sugar

Sugar that has been processed to remove impurities and achieve a desired level of purity.

Intermediate Products

Goods that are produced by one company to be further processed by another company into final products.

Split-off Point

The stage in a production process where joint products can be recognized as distinct products, each capable of being sold or processed further independently.