Answer the Following Questions Using the Information Below

question 206

Multiple Choice

Answer the following questions using the information below:
Wallace Company provides the following data for next year:
The gross profit rate is 40% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.
-St. Claire Manufacturing expects to produce and sell 6,000 units of Big, its only product, for $20 each. Direct material cost is $2 per unit, direct labor cost is $8 per unit, and variable manufacturing overhead is $3 per unit. Fixed manufacturing overhead is $24,000 in total. Variable selling and administrative expenses are $1 per unit, and fixed selling and administrative costs are $3,000 in total. According to generally accepted accounting principles, inventoriable cost per unit of Big would be:

• A)$13.00 per unit
• B)$14.00 per unit
• C)$17.00 per unit
• D)$18.50 per unit

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Definitions:

25%

Represents a quarter or one-fourth of a total amount, often used to describe a portion, increase, or interest rate.

Canadian Dollar

The official currency of Canada, represented by the symbol CAD or C$.

Euro

The official currency of the Eurozone, which is used by most European Union countries.

Percentage Terms

A way of expressing values or changes as a fraction of 100, used to describe proportions relative to a whole.