Porter Company Has Provided the Following Data for the Second

question 30

Multiple Choice

Porter Company has provided the following data for the second quarter of the most recent year: Assume that direct labor is a variable cost and that there were no beginning or ending inventories.
-The gross margin for Porter Company for the second quarter was:

• A) $(12,500)
• B) $80,000
• C) $131,500
• D) $135,000

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Definitions:

Selling Price

The amount of money for which a product or service is sold to customers, determined by costs, market demand, and competition.

Variable Inspection Cost

The cost associated with the examination of products or processes that varies with the level of production or activity.

Machine-Hours

A measure of machine use or production time calculated in hours.

Relevant Range

This is the range of activity within which assumptions about variable and fixed cost behavior are valid.