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Chown Company, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $110
Units in beginning inventory 0
Units produced 8,000
Units sold 7,800
Units in ending inventory 200
Variable costs per unit:
Direct materials $22
Direct labour $31
Variable manufacturing overhead $3
Variable selling and administrative $4
Fixed costs:
Fixed manufacturing overhead $248,000
Fixed selling and administrative $140,400
Problem 1: What was the total gross margin for the month under the absorption costing approach?
A) $179,400.
B) $196,800.
C) $390,000.
D) $7,800.
A budgeted income statement for the two options: paying 20% commission to sales agents and hiring own salespeople and breakeven point for the above two options
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