Susan Florists Had the Following Account Balances at the End

question 101

Multiple Choice

Susan Florists had the following account balances at the end of the current accounting period: A normal gross profit percent is 30%.What is the estimated ending inventory as per the gross profit method?

• A)$100,890
• B)$28,110
• C)$63,410
• D)$65,590

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Definitions:

Break-even Point

The point at which total costs equal total revenue, meaning no profit or loss is generated.

Manufacturing Margin

The difference between the cost of manufacturing the product and the price it is sold for, indicating the profitability of production.

Variable Cost

Costs that change in proportion to the level of activity or volume of production in a company.

Absorption Costing

The reporting of the costs of manufactured products, normally direct materials, direct labor, and factory overhead, as product costs.