Monroe Manufacturing Produces and Sells a Product with a Price

question 118

Multiple Choice

Monroe Manufacturing produces and sells a product with a price of $100/unit.The following data has been prepared for its estimated upper and lower levels of activity. $$\begin{array} { | l | r | r | } \hline \text { Praduction Category } & \text { Lawer Limit } & \text { Upper Limit } \\\hline \text { Units af Production } & 4,000 \text { units } & 6,000 \text { urits } \\\hline \text { Direct Materials } & \$ 60,000 & \$ 90,000 \\\hline \text { Direct Labar } & \$ 80,000 & \$ 120,000 \\\hline \text { Manufacturing Overhead: } & & \\\hline \text { Indirect materials } & \$ 25,000 & \$ 37,500 \\\hline \text { Indirect labor } & \$ 40,000 & \$ 50,000 \\\hline \text { Depreciation } & \$ 20,000 & \$ 20,000 \\\hline \text { Selling and Admin. Expenses: } & & \\\hline \text { Sales salaries } & \$ 50,000 & \$ 65,000 \\\hline \text { Office salaries } & \$ 30,000 & \$ 30,000 \\\hline \text { Advertising } & \$ 45,000 & \$ 45,000 \\\hline \text { Other } & \$ 15,000 & \$ 20,000 \\\hline \text { Tatols } & \$ 365,000 & \$ 47,500 \\\hline\end{array}$$
- The only variable expenses for this company are:

• A)indirect materials,direct materials,and direct labor.
• B)indirect materials,indirect labor,direct materials,and direct labor.
• C)all categories of selling and administrative expenses.
• D)none of the above.

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