During Its First Year of Operations, Silverman Company Paid $10,000

Multiple Choice

During its first year of operations, Silverman Company paid $10,000 for direct materials and $11,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $10,500 while general, selling, and administrative expenses totaled $3,000. The company produced 8,000 units and sold 5,000 units at a price of $6.50 a unit. What is the amount of gross margin for the first year?

A) $12,000
B) $11,000
C) $32,500
D) $12,500