Clear Company Reports the Following Information for Its First Year

question 119

Multiple Choice

Clear Company reports the following information for its first year of operations:
$\begin{array}{ll}\text { Units produced this year } & 50,000 \text { units } \\\text { Units sold this year } & 49,000 \text { units } \\\text { Direct materials } & \$ 7 \text { per unit } \\\text { Direct labor } & \$ 3 \text { per unit } \\\text { Variable overhead } & \$ 210,000 \text { in total } \\\text { Fixed orerhead } & ? \text { in total }\end{array}$

If the company's cost per unit of finished goods using absorption costing is $19.30,what is total fixed overhead?

• A) $350,000
• B) $255,000
• C) $150,000
• D) $249,900
• E) $147,000

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Definitions:

Coffee Import Business

The business activity of bringing coffee from foreign countries into one's own country for sale and distribution.

Indoor Management Rule

A legal principle allowing outsiders dealing with a company to assume that internal company rules have been properly followed.

Corporate Agents

Individuals or entities authorized to act on behalf of a corporation, making decisions and entering into agreements.

Corporate Officers

Individuals appointed to manage the daily operations of a corporation, such as CEOs, CFOs, and COOs, who have specific legal responsibilities.