Use the Information Below to Answer the Following Question(s)

question 131

Multiple Choice

Use the information below to answer the following question(s) .
Fair Score Company manufactures scoreboards for athletic events. It expects to sell 20,000 scoreboards in 2015. The company has enough beginning inventory of direct materials to produce 8,000 units. Beginning work-in-process inventory totals 2,000 units and is 100 percent complete as to material and 50 percent complete as to labour and overhead. Beginning finished units total 4,000 with a target ending finished inventory of 3,000 units. The scoreboards sell for $800. There is no ending work-in-process inventory. Direct materials costs for each scoreboard total $200 while direct labour is $80. Manufacturing overhead is $60 per scoreboard.
-What will be the Fair Score Company budgeted amount of cost of goods sold?

• A) $8,160,000
• B) $6,800,000
• C) $6,460,000
• D) $6,120,000

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Definitions:

Gross Margin Ratio

A financial metric that measures the proportion of money left over from revenues after accounting for the cost of goods sold, expressed as a percentage of sales revenue.

Net Sales

The total revenue from sales transactions after subtracting returns, allowances for damaged or missing goods, and any discounts offered.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and overhead costs.

Net Income

The final amount of profit made by a company once it subtracts all costs and taxes from its overall revenues.