Lone Star Has Computed the Following Unit Costs for the Year

question 37

Multiple Choice

Lone Star has computed the following unit costs for the year just ended: $$\begin{array} { l r } \text { Direct material used } & \$ 12 \\\text { Direct labor } & 18 \\\text { Variable manufacturing overhead } & 25 \\\text { Fixed manufacturing overhead } & 29 \\\text { Variable selling and administrative cost } & 10 \\\text { Fixed selling and administrative cost } & 17\end{array}$$ Under variable costing, each unit of the company's inventory would be carried at:

• A) $35.
• B) $55.
• C) $65.
• D) $84.
• E) None of the other answers are correct.

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Definitions:

Noncontrolling Interest

A minority shareholding in a company where the shareholder does not have the majority of voting rights.

Acquisition-Date Fair Value

The value of an asset or liability at the time of acquisition, determined according to applicable accounting standards for fair value measurement.

Controlling Interest

Ownership of a sufficient portion of a company's stock to dictate policies and make management decisions, typically over fifty percent.

Noncontrolling Interest

A portion of the equity in a subsidiary not directly owned by the parent company, reflecting the minority shareholders' interest in the subsidiary.