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Smith, which began business at the start of the current year, had the following data:

Planned and actual production: 40,000 units
Sales: 37,000 units at $15 per unit
Production costs:
Variable: $4 per unit
Fixed: $260,000
Selling and administrative costs:
Variable: $1 per unit
Fixed: $32,000

The gross margin that the company would disclose on an absorption-costing income statement is:

A. $97,500.

B. $147,000.

C. $166,500.

D. $370,000.

E. some other amount.

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Accounting Basics, Accounting

Category:- Accounting Basics
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