A Company Has the Following Information for Its First Month

A company has the following information for its first month of operations: $\begin{array}{ll}\text { Raw material s used } & \$ 25,000 \\\text { Sales ( } \$ 65 \text { per unit) } & \$ 78,000 \\\text { Direct labor } & \$ 42,000 \\\text { Variable factory overhead } & \$ 17,000 \\\text { Fixed factory overhead } & \text { unknown }\\\text { Variable s elling and administrative } & \$ 3,000 \\\text { Fixed selling and adminis trative } & \$ 5,000 \\\text { Gross profit } & \$ 30,000 \\\text { Contribution margin } & \text { unknown }\end{array}$ The company sold half of the units it produced. of factory overhead is included in the ending inventory under absorption costing.

A) $- 0-
B) $6,000
C) $8,400
D) $12,000

Correct Answer:

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