If the direct material cost of goods sold is $7500, and through contribution is $15650, then revenues will be _________?
Correct answer: B. $23,150
- A. $8,150
- B. $23,150
- C. $33,150
- D. $13,150
Explanation
Under throughput costing, throughput contribution equals revenue minus direct material cost, so revenue is $15,650 + $7,500 = $23,150. The other amounts do not reconcile the contribution equation.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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