Operating Budgets for the DiP Company Reveal the Following Information

question 91

Multiple Choice

Operating budgets for the DiP Company reveal the following information: net sales,$400,000;beginning materials inventory,$23,000;materials purchased,$185,000;beginning work in process inventory,$64,700;beginning finished goods inventory,$21,600;direct labor costs,$34,000;overhead applied,$67,000;ending work in process inventory,$61,200;ending materials inventory,$18,700;and ending finished goods inventory,$16,300.Compute DiP Company's budgeted gross margin.

• A)$299,800
• B)$293,800
• C)$150,900
• D)$100,900

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Definitions:

Interest Expense

The cost incurred by an entity for borrowing funds, typically reported on the income statement.

Basic EPS

A measure of a company's performance that divides earnings available to common shareholders by the average number of common shares outstanding.

Diluted EPS

A performance metric that calculates a company's earnings per share (EPS) assuming all convertible securities were converted to common stock.

Treasury Stock

Shares bought back by the issuing company, reducing the amount of outstanding stock on the open market.