GHI Corporation, a merchandising company, reported the following results for Aug
ID: 2423094 • Letter: G
Question
GHI Corporation, a merchandising company, reported the following results for August:
Number of units sold
2,700 units
Selling price per unit
$664 per unit
Unit cost of goods sold
$405 per unit
Variable selling expense per unit
$48 per unit
Total fixed selling expense
$56,500
Variable administrative expense per unit
$13 per unit
Total fixed administrative expense
$118,200
Cost of goods sold is a variable cost in this company.
5. The contribution margin for August is:
A. 534,600
B. 699,300
C. 359,900
D. 1,453,400
8. Property taxes on a manufacturing facility are classified as:
Conversion cost
Period cost
A)
Yes
No
B)
Yes
Yes
C)
No
Yes
D)
No
No
please give the details, thanks!
Number of units sold
2,700 units
Selling price per unit
$664 per unit
Unit cost of goods sold
$405 per unit
Variable selling expense per unit
$48 per unit
Total fixed selling expense
$56,500
Variable administrative expense per unit
$13 per unit
Total fixed administrative expense
$118,200
Explanation / Answer
Contribution margin = (Selling price per unit - Variable cot per unit)*No. of units sold
= [$664 - ($405+$48+$13)]*2,700 = $ 534,600
Therefore, option a is correct.
Property tax has top be paid periodically. Hence,It is peroidic cost.
Therefore, option c is correct.
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