Fortran Industries Produces Burner Elements for Stoves

question 20

Multiple Choice

Fortran Industries produces burner elements for stoves.Each element sells for $20,and the company sells approximately 2,000,000 elements each year.Unit cost data for the year follows: The unit cost of an element for variable costing inventory purposes is:

• A)$15.50
• B)$12.00
• C)$10.50
• D)$7.00

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Definitions:

Proportionate Consolidation Method

A method of accounting where a parent entity combines its share of the subsidiary's assets, liabilities, incomes, and expenses line by line into its financial statements.

Non-Controlling Interest (NCI)

A portion of the equity in a subsidiary not attributable, directly or indirectly, to a parent company, reflecting the minority shareholders' stake.

Consolidated Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders' equity of a parent company and its subsidiaries as a single entity.

Consolidated Retained Earnings

The portion of earnings not distributed as dividends to shareholders and consolidated from both the parent company and its subsidiaries.