Cloudy Company Reports the Following Information for the Current Year

question 114

Multiple Choice

Cloudy Company reports the following information for the current year.
$$\begin{array} { l l } \text { Units produced this year } & 51,000 \text { units } \\\text { Units sold this year } & 53,000 \text { units } \\\text { Direct materials } & \$ 6 \text { per unit } \\\text { Direct labor } & \$ 3 \text { per unit } \\\text { Variable overhead } & \$ 255,000 \text { in total } \\\text { Fixed overhead } & ? \text { in total }\end{array}$$
If the company's cost per unit of finished goods using absorption costing is $18, what is total fixed overhead?

• A) $204,000
• B) $212,000
• C) $213,690
• D) $222,070
• E) $459,000

---

Definitions:

Normal Return

The typical profit that is expected from a standard investment or business activity, accounting for the cost of capital.

Computer Software

Programs and operating information used by a computer to perform specific tasks.

Total Revenue

The total income received by a firm from the sale of its goods or services before any costs or expenses are deducted.

Opportunity Cost

The value of the next best alternative that is forgone when making a decision.