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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: 34,000 units at $17 per unit
Production costs:
Variable: $5 per unit
Fixed: $322,000
Selling and administrative costs:
Variable: $2 per unit
Fixed: $39,200
Problem 1: The gross margin that the company would disclose on an absorption-costing income statement is:
Multiple Choice
Option 1: $134,300.
Option 2: $340,000.
Option 3: $86,000.
Option 4: None of the answers is correct.
Option 5: $65,300.
Financial Statement Analysis and Preparation
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