Couric Company Reported the Following Information About the Production and Sale

question 109

Multiple Choice

Couric Company reported the following information about the production and sale of its only product during the first month of operations:
$\begin{array}{ll}\text { Selling price per unit } & \$ 117,00 \\\text { Sales } & \$ 117,000 \\\text { Direct materials used } & \$ 37,500 \\\text { Direct labor } & \$ 63,000 \\\text { Variable factory overhead } & \$ 25,500 \\\text { Fixed factory overhead } & \$ 80,000 \\\text { Variable selling and administrative expenses } & \$ 4,500 \\\text { Fixed selling and administrative expenses } & \$ 7,500 \\\text { Units produced } & 2,000 \text { units } \\\text { Units sold } & 1,000 \text { units } \\\text { Production volume variance } & \$ 0\end{array}$
Under absorption costing,what is the Cost of Goods Sold?

• A) $63,000
• B) $103,000
• C) $126,000
• D) $206,000

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Definitions:

Assumption of Risk

A legal defense that claims an individual voluntarily and knowingly assumed the danger inherent to a risky activity they participated in.

Section 402A

A section of the Restatement (Second) of Torts in American law that addresses the liability of the seller for harm caused by a product despite the absence of a contractual relationship.

Preemption

A legal doctrine under which a higher authority's laws take precedence over those of a lower authority when both entities have the power to legislate on a subject.

Mootness

A concept whereby a case is deemed inadmissible for judicial review if the underlying issue has been resolved or rendered irrelevant.