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Exhibit 5-7 Last month, Ellison Industries sold its product for $100 per unit. Fixed production costs...

Exhibit 5-7 Last month, Ellison Industries sold its product for $100 per unit. Fixed production costs were $50,000, and variable production costs amounted to $21 per unit. Fixed selling and administrative costs totaled $20,000, and variable selling and administrative costs amount to $3.00 per unit. Dawson produced and sold 6,000 units last month. Refer to Exhibit 5-7. Which of the following amounts represents total cost of goods sold? Group of answer choices $176,000 $126,000 $164,000 $424,000

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Answer #1

Number of units produced = 6,000

Variable production cost = $21 per unit

Total variable production cost = Number of units produced x Variable production cost per unit

= 6,000 x 21

= $126,000

Fixed production costs = $50,000

Total cost of goods sold = Total variable production cost + Fixed production costs

= 126,000 + 50,000

= $176,000

First option is the correct option.

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