During the Year Ended 30 June 2016,Rico Ltd Had Net

question 15

Multiple Choice

During the year ended 30 June 2016,Rico Ltd had net sales of $750 000 and net purchases of $440 000.Cost of goods sold was $475 000.What was Rico Ltd's gross profit for the year ended 30 June 2016?

• A) $240 000
• B) $275 000
• C) $310 000
• D) $475 000

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing a more accurate reflection of costs.

Direct Labor-Hours

Direct labor-hours are the total hours worked by employees directly involved in the manufacturing process.

Direct Materials Cost

The cost of raw materials used to produce a product, which are directly attributable to the product.

Direct Labor-Hours

The combined working hours of employees directly contributing to the manufacturing cycle.