Question:
Cutterski Corporation manufactures a propeller. Shown below is Cutterski's cost structure:
|
|
Variable
|
Total fixed
|
|
|
cost per
|
cost for the
|
|
|
propeller
|
year
|
|
Manufacturing cost
|
$114
|
$810,000
|
|
Selling and administrative
|
$20
|
$243,000
|
In its first year of operations, Cutterski produced 60,000 propellers but only sold 54,000.
At what amount will Cutterski report its cost of goods sold for this first year for external reporting purposes?
A) $6,156,000
B) $6,885,000
C) $6,966,000
D) $8,208,000