If Variable Cost of Goods Sold Totaled $90,000 for the Year

question 61

Multiple Choice

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each) and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each) , the effect of the unit cost factor on the change in variable cost of goods sold is:

• A) $6,400 decrease
• B) $6,400 increase
• C) $7,200 increase
• D) $7,200 decrease

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Definitions:

Demand Constraint

A limit placed on the quantity of a product that can be produced or sold, often due to resource limitations.

Distribution Center

A warehouse or storage facility where goods are stored for further distribution to retailers or customers.

Television Sets

Electronic devices designed to receive broadcast signals and display them as visual images.

Demand Constraint

A limitation or restriction on the amount of demand that can be satisfied due to factors such as supply limitations or production capacity.