Answer the Following Questions Using the Information Below

question 7

Multiple Choice

Answer the following questions using the information below:
The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows:

-For last year, Wampum Enterprises reported revenues of $420,000, cost of goods sold of $108,000, cost of goods manufactured of $101,000, and total operating costs of $70,000. Gross margin for last year was:

• A)$319,000
• B)$312,000
• C)$249,000
• D)$242,000

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Definitions:

Initial Direct Costs

The expenditures that a company can directly attribute to acquiring a new lease or originating a loan.

Operating Lease

A lease agreement that allows for the use of an asset but does not convey rights similar to ownership of the asset.

Prepaid Asset

Costs that are paid for upfront and listed as assets prior to their utilization or consumption.

Interest Rate Implicit

The interest rate in a lease that, when applied to the lease payments, discounts them to equal the fair value of the leased asset.