At the Beginning of the Year,Rangle Company Expected to Incur

question 148

Multiple Choice

At the beginning of the year,Rangle Company expected to incur $54,000 of overhead costs in producing 6,000 units of product.The direct material cost is $20 per unit of product.Direct labor cost is $30 per unit.During January,600 units were produced.The total cost of the units made in January was:

• A) $30,000
• B) $5,400
• C) $35,400
• D) None of the answers are correct.

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Definitions:

Operating Expenses

Expenses that relate to the day-to-day operations of a business, excluding costs associated with the production of goods.

Capital Budgeting

The method of assessing and choosing long-term investments that align with the objective of maximizing shareholder wealth.

Incremental Sales

The additional sales generated by a particular marketing campaign or business decision, beyond what would have been achieved without it.

Operating Expenses

Costs that are related to the day-to-day operations of a business, such as rent, utilities, and payroll, excluding cost of goods sold.