(Appendix 5A)Phoeuk Corporation Manufactures and Sells One Product

question 46

Multiple Choice

(Appendix 5A) Phoeuk Corporation manufactures and sells one product.The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs.During its first year of operations, the company produced 41, 000 units and sold 40, 000 units.The company's only product is sold for $231 per unit. Assume that the company uses a variable costing system that assigns $22 of direct labor cost to each unit that is produced.The unit product cost under this costing system is:

• A)$88 per unit
• B)$110 per unit
• C)$209 per unit
• D)$166 per unit

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Definitions:

Fixed Interest Rate

An interest rate on a liability, such as a loan or mortgage, that remains constant for either an agreed period of time or the entire term of the loan.

Functional Currency

The form of money used in the main economic region where a business is active and conducts its dealings.

Net Exchange Differences

The net result of gains or losses on foreign currency transactions and translation of foreign operations, reflecting the impact of exchange rates fluctuations on financial statements.

Financial Instruments

Contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.