A Company Had Net Sales of $340,500, Its Cost of Goods

question 182

True/False

A company had net sales of $340,500, its cost of goods sold was $257,000, and its net income was $13,750. The company's gross margin ratio equals 24.5%.
($340,500 - $257,000)/$340,500 = 24.5%

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Definitions:

Variable Factory Overhead

Costs of manufacturing that fluctuate with the level of production output, such as utilities and raw materials.

Total Factory Overhead Cost Variance

The difference between the actual overhead costs incurred and the standard overhead costs previously estimated for a production process.

Standard Costs

Pre-determined or estimated costs of manufacturing a product or providing a service, used as targets or benchmarks.

Variances

Differences between planned financial outcomes and the actual results, used for budgetary control and operational analysis.