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Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units

Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units during Year 2, while producing 12,000 units and selling 15,000 units in year 3.

Per Unit Per Year
Selling price $ 240
Direct materials $ 92
Direct labor $ 61
Variable manufacturing overhead $ 10
Sales commission $ 11
Fixed manufacturing overhead $ 450,000
Fixed selling and administrative expense $ 150,000

Using absorption costing, what is the cost of goods sold for Year 3?

Multiple Choice

  • $3,172,500

  • $3,007,500

  • $3,150,000

  • $2,985,000

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