Use the Following Selected Information from Farris, LLC to Determine

question 178

Multiple Choice

Use the following selected information from Farris, LLC to determine the Year 2 and Year 1 common size percents for cost of goods sold using Year 1 net sales as the base.

• A) 36.4% for Year 2 and 41.1% for Year 1.
• B) 55.0% for Year 2 and 56.0% for Year 1.
• C) 119.4% for Year 2 and 100.0% for Year 1.
• D) 117.2% for Year 2 and 100.0% for Year 1.
• E) 65.1% for Year 2 and 64.6% for Year 1.

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Definitions:

Defective Units

Products produced by a manufacturing process that do not meet the quality standards set by the company and cannot be sold to customers.

Production Process

A series of actions, operations, or methods employed in the manufacture or production of goods or services.

Machine Hours

The cumulative duration during which machines are utilized in the production process, often a factor in costing models.

Contribution Margin

The amount by which sales revenue exceeds variable costs, it's a key figure that helps in assessing the profitability of products or services.