Krepps Corporation produces a single product. Last year, Krepps manufactured 29,650 units and sold 24,600 units. Production costs for the year were as follows:

Direct materials	$222,375
Direct labor	$145,285
Variable manufacturing overhead	$243,130
Fixed manufacturing overhead	$563,350

Sales totaled $1,070,100 for the year, variable selling and administrative expenses totaled $140,220, and fixed selling and administrative expenses totaled $210,515. There was no beginning inventory. Assume that direct labor is a variable cost.

Under absorption costing, the ending inventory for the year would be valued at:

Multiple Choice

• $269,980

• $199,980

• $261,480

• $227,480

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An income statement for Sam's Bookstore for the first quarter of the year is presented below:

Sam's Bookstore
Income Statement
For Quarter Ended March 31
Sales		$ 910,000
Cost of goods sold		565,000
Gross margin		345,000
Selling and administrative expenses
Selling	$ 120,000
Administrative	144,000	264,000
Net operating income		$ 81,000

On average, a book sells for $70. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed.

The contribution margin for Sam's Bookstore for the first quarter is:

Garrison 17e Rechecks 2020-09-09

Multiple Choice

• $243,600

• $280,000

• $666,400

• $808,600

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A partial listing of costs incurred during March at Febbo Corporation appears below:

Factory supplies	$ 9,000
Administrative wages and salaries	$ 85,000
Direct materials	$ 126,000
Sales staff salaries	$ 30,000
Factory depreciation	$ 33,000
Corporate headquarters building rent	$ 43,000
Indirect labor	$ 26,000
Marketing	$ 65,000
Direct labor	$ 99,000

The total of the period costs listed above for March is:

Multiple Choice

• $291,000

• $293,000

• $68,000

• $223,000

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