If Variable Cost of Goods Sold Totaled $80,000 for the Year

question 23

Multiple Choice

If variable cost of goods sold totaled $80,000 for the year (16,000 units at $5.00 each) and the planned variable cost of goods sold totaled $86,250 (15,000 units at $5.75 each) , the effect of the unit cost factor on the change in variable cost of goods sold is:

• A) $12,000 increase
• B) $5,750 decrease
• C) $12,000 decrease
• D) $5,750 increase

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Definitions:

Inventory

The total amount of goods and materials held by a business for the purpose of resale or production, including raw materials, work-in-progress, and finished goods.

Manufactured Units

Manufactured units refer to the total number of units produced by a company during a specific period through its manufacturing process.

April

The fourth month of the year in the Gregorian calendar.

Sales Estimates

Sales estimates are projections of the amount of revenue that will be generated through sales activities in a future period.