Brady Ltd Uses a Normal Absorption Costing System in Which

question 51

Multiple Choice

Brady Ltd uses a normal absorption costing system in which the overhead rate and variable manufacturing costs have remained unchanged for the last 2 years. During the current year the following activity occurred: The firm had no beginning or ending work in process inventories. However, there were 1,000 units in beginning finished goods.
If variable costing had been used, the cost of goods sold would be:

• A) $133,280
• B) $93,100
• C) $98,000
• D) $111,720

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Definitions:

Production Costs

Expenses directly attributed to the process of producing goods or providing services.

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Components on a vehicle that frame the wheel well to prevent dirt and debris from being thrown into the air by the spinning tires.

Production Line

A sequence of operations that workers perform to assemble a product in a factory.