Hyper Color Company manufactures widgets The following data

Hyper Color Company manufactures widgets. The following data is related to sales and production of the widgets for last year. Selling price per unit Variable manufacturing costs per unit Variable selling and administrative expenses per unit Fixed manufacturing overhead (in total) Fixed selling and administrative expenses (in total) Units produced during the year Units sold during year $170 $63 $5 $32,000 $8,000 1,900 1,000 Using absorption costing, what is gross profit for last month? (Round any intermediary calculations to the nearest whole dollar.) O A. $250,000 O B. S90,000 O C. $1,820,000 D. $170,000 Click to select your answer.

Solution

B. $90,000

Fixed MOH = $32,000 / 1,900 = $17

Total Manufacturing cost = Fixed MOH + Variable manufacturing cost = $17 + $63 = $80

Cost of goods sold = $80 * 1,000 = $80,000

Gross Profit = Sales - Cost of goods sold = ($170 × 1,000) - $80,000 = $90,000