RHO Company Began Its Operations on January 1 and Produces

question 47

Multiple Choice

RHO Company began its operations on January 1 and produces a single product that sells for $10.25 per unit.Standard capacity is 80,000 units per year.The 80,000 units were produced and 70,000 units were sold during the year. Manufacturing costs and selling and administrative expenses follow: What is the standard cost of manufacturing a unit of product?

• A)$6.50
• B)$7.00
• C)$5.50
• D)$6.00

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Definitions:

Variable Cost

Variable costs change in proportion to the level of business activity or production volume, such as raw materials and packaging.

Activity Level

Refers to the volume of production or operations within a specific period, influencing costs and operational capacity.

Units

The individual items or products counted for inventory, production, or sales purposes.

Property Tax

A tax assessed on real estate by the local government, based on the property's value.