Rickman,Inc There Are No Beginning Inventories

question 136

Multiple Choice

Rickman,Inc.reports the following information: $$\begin{array} { | l | r | } \hline \text { Units produced } & 610 \text { units } \\\hline \text { Units sold } & 420 \text { units } \\\hline \text { Sales price } & \$ 160 \text { per unit } \\\hline \text { Direct materials } & \$ 27 \text { per unit } \\\hline \text { Direct labor } & \$ 12 \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 13 \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 17,200 \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 4 \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 14,200 \text { per year } \\\hline\end{array}$$ There are no beginning inventories.What is the ending balance in Finished Goods Inventory using variable costing?

• A) $9,880
• B) $7,410
• C) $10,640
• D) $15,237

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Definitions:

Absolute Advantage

A situation where an individual or entity can produce more of a good or service with the same amount of resources compared to others.

Input Requirements

The set of resources, materials, and labor needed for the production of goods or services.

Absolute Advantage

A condition where a country, individual, or company can produce a good or service more efficiently than competitors using the same amount of resources.

Opportunity Cost

The opportunity cost incurred by choosing a specific alternative over others.