Use the Information Below to Answer the Following Question(s)

question 102

Multiple Choice

Use the information below to answer the following question(s) .
Samson Inc.expects to sell 10,000 barbells for $18.00 each.Direct materials costs are $5.00,direct manufacturing labour is $6.00,and manufacturing overhead is $2.50 per barbell.Each barbell requires 6 kilograms (kg) of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs;the units in beginning inventory are completed before new units are started..Each barbell requires one-quarter hour of direct labour,and manufacturing overhead is allocated based on direct labour hours.Marketing costs are $2.00 per barbell.The following inventory levels are expected to apply to 2016:

-On the 2016 budgeted income statement,what amount will be reported for gross margin?

• A)$45,000
• B)$70,000
• C)$25,000
• D)$40,000
• E)$35,000

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Definitions:

Punitive Damages

Monetary compensation awarded to a plaintiff, over and above actual damages, intended to punish a defendant for particularly harmful behavior and deter future similar acts.

Right Eye

Referring to the eye located on the right side of a person's face.

Special Damages

Specific damages that would flow from a breach of contract.

Proximate Cause

The primary cause of an injury in a legal sense, which is directly responsible for the event in question and without which the event would not have occurred.