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Riverton Corp., which began business at the start of the current year, had the following data: Planned and actual production: 40,000 units Sales: 38,000 units

Riverton Corp., which began business at the start of the current year, had the following data:

Planned and actual production: 40,000 units

Sales: 38,000 units at $16 per unit

Production costs:

Variable: $3 per unit

Fixed: $287,000

Selling and administrative costs:

Variable: $2 per unit

Fixed: $39,500

The gross margin that the company would disclose on an absorption-costing income statement is:

(Choose One)

  • $221,350.
  • $207,000.
  • $152,350.
  • $418,000.
  • None of the answers is correct.

Can you explain this answer and which of the above is correct? Thanks!

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