Jean Peck's Furniture's Manufactures Tables for Hospitality Sector At the End of the Month Jean Peck's Furniture's Has

question 49

Multiple Choice

Jean Peck's Furniture's manufactures tables for hospitality sector. It takes only bulk orders and each table is sold for $300 after negotiations. In the month of January, it manufactures 3,000 tables and sells 2,250 tables. Actual fixed costs are the same as the amount fixed costs budgeted for the month.
The following information is provided for the month of January:
$\begin{array}{ll}\text { Variable manufacturing costs } & \$ 120 \text { per unit } \\\text { Fixed manufacturing costs } & \$ 90,000 \text { per month } \\\text { Fixed Administrative expenses } & \$ 25,000 \text { per month }\end{array}$ At the end of the month Jean Peck's Furniture's has an ending inventory of finished goods of 750 units. The company also incurs a sales commission of $10 per unit.
-What is the gross margin when using absorption costing?

• A) $675,000
• B) $527,500
• C) $270,000
• D) $337,500

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Definitions:

Supplied

The quantity of a good or service that producers are willing and able to sell at a given price.

Closed Economy

A financial structure that doesn't engage with external economies through trade, investment, or the movement of people.

Public Saving

The difference between the tax revenues and government spending of a country, representing the government's surplus or deficit.

National Saving

The total saving of an economy, consisting of both private and public saving.