Gordon Company Produces a Single Product That Sells for $10

question 190

Multiple Choice

Gordon Company produces a single product that sells for $10 per unit. Last year there were no beginning inventories, 100,000 units were produced, and 80,000 units were sold. The company has the following cost structure:
-The carrying value on the balance sheet of the ending finished goods inventory under absorption costing would be:

• A)$80,000
• B)$104,000
• C)$110,000
• D)$124,000

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Definitions:

Status Quo Bias

A cognitive bias that leads individuals to prefer things to remain the same or maintain their current state over pursuing change.

Status Quo Bias

The preference for maintaining current conditions or resisting change, even when better alternatives exist.

Anchoring Effect

A cognitive bias where an individual depends too heavily on an initial piece of information (the "anchor") when making decisions.

Endowment Effect

A psychological inclination to value possessions more highly solely due to personal ownership.