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

question 92

Multiple Choice

Camile Company has no beginning and ending inventories,and reports the following data about its only product:
$$\begin{array} { l l } \text { Direct materials used } & \$ 100,000 \\\text { Direct labor } & \$ 80,000 \\\text { Fixed indirect manufacturing } & \$ 50,000 \\\text { Fixed selling and administrative } & \$ 220,000 \\\text { Variable indirect manufacturing } & \$ 20,000 \\\text { Variable selling and administrative } & \$ 75,000 \\\text { Selling price(per unit) } & \$ 84\end{array}$$
$\begin{array} { l } \text {Units produced and sold }&10,000 \\\end{array}$

Camile Company uses the absorption approach to prepare the income statement.What is the product cost per unit?

• A) $20
• B) $25
• C) $27.50
• D) $32.50

Determine inventory investment given beginning and ending inventory levels.

Assess the profitability of borrowing for investment purposes based on different interest rates.

Evaluate the acceptability of an investment or borrowing opportunity under various financial conditions.

Compute gross investment based on expenditures, inventory changes, and depreciation.

---

Definitions:

Diversified Portfolio

An investment strategy that spreads investments across various asset classes in order to reduce risk.

Company-specific

Refers to information, events, or characteristics that only affect a single company, not the industry as a whole or the market at large.

Unsystematic Events

Specific, unpredictable events that affect a single company or a small group of companies, not the entire market.

Investment Risk

The potential for loss of value in an investment, often measured by the variability of returns associated with a given asset.