Question

1:

Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price	$ 138
Units in beginning inventory	0
Units produced	2,600
Units sold	2,310
Units in ending inventory	290

Variable costs per unit:
Direct materials	$ 49
Direct labor	$ 27
Variable manufacturing overhead	$ 6
Variable selling and administrative expense	$ 6
Fixed costs:
Fixed manufacturing overhead	$36,400
Fixed selling and administrative expense	$13,860

The total gross margin for the month under the absorption costing approach is:

Multiple Choice

• $97,020

• $83,160

• $166,320

• $83,160

__________________________

2:

Dake Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows:

	Average Cost per Unit
Direct materials	$ 7.05
Direct labor	$ 3.20
Variable manufacturing overhead	$ 1.80
Fixed manufacturing overhead	$ 3.30
Fixed selling expense	$ 1.10
Fixed administrative expense	$ 0.80
Sales commissions	$ 0.90
Variable administrative expense	$ 0.80

If 4,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:

Multiple Choice

• $41,000

• $52,200

• $61,400

• $48,200

________________

3:

Krepps Corporation produces a single product. Last year, Krepps manufactured 33,930 units and sold 28,300 units. Production costs for the year were as follows:

Direct materials	$288,405
Direct labor	$145,899
Variable manufacturing overhead	$288,405
Fixed manufacturing overhead	$542,880

Sales totaled $1,287,650 for the year, variable selling and administrative expenses totaled $164,140, and fixed selling and administrative expenses totaled $206,973. There was no beginning inventory. Assume that direct labor is a variable cost.

Under absorption costing, the ending inventory for the year would be valued at:

Multiple Choice

• $271,499

• $209,999

• $279,999

• $237,499

Answer 1

The answer has been presenetd in the supporting sheet.