Answer:
It should continue the production in the short-run.
Explanation:
Given the unit produced by Mars Inc. = 100000 boxes.
The selling price of boxes = $4 per box.
The variable costs = $3 per box.
The fixed costs = $150000
The total sales revenue = number of boxes × selling price
= 100000 × 4
= $ 400000
In the short run, the firm should continue its production because it still covers the variable costs.
Answer:
$155,700
Explanation:
Absorption costing
Sales $164 × 3,260 = $534,640
Less cost of goods sold
Opening inventory
Add variable cost of goods manufactured
[3,700 × ($51 + $32 + $6 = $89)] = $329,300
Fixed manufacturing cost
$88,800
Cost of goods available for sale
$418,100
Less ending inventory 440 × $89
$39,160
Cost of goods sold
$378,940
Gross margin
$155,700
Less variable selling and administration expenses $6 × 3,260
$19,560
Fixed selling and administrative expenses
$32,600
The total gross margin for the month under the absorption costing approach is $155,700
Answer: Statue of limitations is the correct answer
