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Arca Company reports the following for its product for its first year of operations. Direct materials $ 87 per unit Direct labor $ 67 per

Arca Company reports the following for its product for its first year of operations.

Direct materials $ 87 per unit
Direct labor $ 67 per unit
Variable overhead $ 37 per unit
Fixed overhead $ 104,160 per year
Variable selling and administrative expenses $ 7 per unit
Fixed selling and administrative expenses $ 57,000 per year

The company sells its product for $385 per unit. Compute gross profit using absorption costing assuming the company produces and sells 2,170 units.

Multiple Choice

  • $835,450

  • $334,180

  • $494,760

  • $316,820

  • $221,340

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