Answered: Compute ABC's cost of goods sold using…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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ABC began operations at the beginning of the current year and keeps absorption-cost accounting records.

There is no beginning finished-goods inventory. ABC achieved its planned production level for the year. The company's fixed manufacturing overhead totaled RM188,000, and the firm paid a 10% commission based on gross sales (RM) to its sales force.

On the company's profit or loss statement and end-of-year statement of financial position, the following information was included:

Profit or Loss Data:	RM
Sales revenues (35,000 units @ RM24)	840,000
Gross Margin	210,000
Total sales and administrative expenses	160,000

Financial Position Data:
Ending finished-goods inventory (12,000 units)	216,0000

Compute ABC's cost of goods sold using absorption costing.

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