Andy Basil Industries Inc Under Absorption Costing,what Is the Cost of Goods Sold?
A)

question 49

Multiple Choice

Andy Basil Industries Inc.reported the following information about the production and sale of its only product during the first month of operations:
$\begin{array}{ll}\text { Selling price per unit } & \$ 225,00 \\\text { Sales } & \$ 360,000 \\\text { Direct materials used } & \$ 176,000 \\\text { Direct labor } & \$ 100,000\\\text { Variable factory overhead } & \$ 44,000 \\\text { Fixed factory overhead } & \$ 80,000 \\\text { Variable selling and administrative expenses } & \$ 20,000 \\\text { Fixed selling and administrative expenses } & \$ 10,000 \\\text { Production volume variance } & 0 \\\text { Ending inventory, Direct Materials } & 0 \\\text { Ending inventory, Work-in-process } & 0\\\text { Ending inventory, Finished Goods }&400 \text { units }\end{array}$
Under absorption costing,what is the Cost of Goods Sold?

• A) $256,000
• B) $272,000
• C) $320,000
• D) $360,000

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Definitions:

Discharge

The release from obligations imposed by the Bankruptcy and Insolvency Act.

Outstanding Mortgage

The remaining amount of money owed on a mortgage not yet repaid to the lender.

Utmost Good Faith

A principle that obliges all parties to an insurance contract to act honestly and disclose all relevant facts.