Gage Company Reports the Following Information for Its First Year

question 127

Multiple Choice

Gage Company reports the following information for its first year of operations:
$\begin{array}{ll}\text { Units produced this year } & 7,000 \text { units } \\\text { Units sold this year } & 6,500 \text { units } \\\text { Direct materials } & \$ 22 \text { per unit } \\\text { Direct labor } & \$ 30 \text { per unit } \\\text { Variable overhead } & ? \text { in total } \\\text { Fixed overhead } & \$ 56,000 \text { in tota }\end{array}$

If the company's cost per unit of finished goods using variable costing is $63,what is total variable overhead?

• A) $21,000
• B) $71,500
• C) $77,000
• D) $19,500
• E) $16,590

---

Definitions:

Biologists

Scientists who study living organisms and their relationship to the environment, encompassing various specialties within biological sciences.

Insects

A class of arthropods with a chitinous exoskeleton, a three-part body, three pairs of jointed legs, compound eyes, and two antennae.

Adaptable

The ability of an organism, individual, or system to adjust or change in response to new conditions or environments.

Lithosphere

The lithosphere is the rigid outer layer of the Earth, encompassing the crust and the uppermost part of the mantle, characterized by its solid state and involvement in tectonic activities.