Yankee Corporation Manufactures a Single Product

question 121

Multiple Choice

Yankee Corporation manufactures a single product.The company has the following cost structure: Last year,4,000 units were produced and 3,500 units were sold.There were no beginning inventories. Under absorption costing,the cost of goods sold for the year would be:

• A)$28,000
• B)$24,500
• C)$17,500
• D)$14,000

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Definitions:

Financial Statements

Consolidated reports detailing the financial performance and position of a company, including the balance sheet, income statement, and cash flow statement.

Inventory

The goods and materials a business holds for the ultimate purpose of resale or processing.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

FIFO Method

An inventory valuation method where the first goods purchased are the first ones to be sold, "First In, First Out".