Delaware Has Computed the Following Unit Costs for the Year

question 22

Multiple Choice

Delaware has computed the following unit costs for the year just ended: $$\begin{array} { l l } \text { Variable manufacturing overhead } & 85 \\\text { Fixed manufacturing overhead } & 20 \\\text { Variable selling and administrative cost } & 18 \\\text { Fixed selling and administrative cost } & 11\end{array}$$ Which of the following choices correctly depicts the per-unit cost of inventory under variable costing and absorption costing?

• A) Variable, $85; absorption, $105.
• B) Variable, $85; absorption, $116.
• C) Variable, $103; absorption, $105.
• D) Variable, $103; absorption, $116.
• E) None of the other answers are correct.

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Definitions:

Compounded Semi-annually

Interest calculated twice a year, factoring in previously accrued interest for each calculation.

Strip Bond

An investment instrument entitling its owner to receive only the face value of a bond at maturity.

Nominal Rate

The stated interest rate of an investment or loan, not adjusted for compounding or inflation.

Population Growth

The increase in the number of individuals in a population, often measured as the rate at which the number of individuals increases over a specific period of time.