Gonzalez Company Has No Beginning and Ending Inventories,and Reports the Following

question 43

Multiple Choice

Gonzalez Company has no beginning and ending inventories,and reports the following data about its only product:
$$\begin{array} { l l } \text { Direct materials used } & \$ 300,000 \\\text { Direct labor } & \$ 80,000 \\\text { Fixed indirect manufacturing } & \$ 100,000 \\\text { Fixed selling and administrative } & \$ 190,000 \\\text { Variable indirect manufacturing } & \$ 20,000 \\\text { Variable selling and administrative } & \$ 90,000 \\\text { Selling price(per unit) } & \$ 50\end{array}$$
$\begin{array} { l } \text {Units produced and sold }&10,000 \\\end{array}$

Gonzalez Company uses the absorption approach to prepare the income statement.What is the gross margin?

• A) $0
• B) $20,000
• C) $100,000
• D) $120,000

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