Crystal, the Owner of Crystal Clean, Is Planning for the Next

Multiple Choice

Crystal, the owner of Crystal Clean, is planning for the next year. She uses the absorption method to determine the evaluation of employees and how much to increase their hourly wage. She has budgeted the following information: There were no price or efficiency variances for either year. Crystal writes off any fixed MOH volume variance directly to COGS. Calculate the gross margin for year 1.

A) $220,000.
B) $268,000.
C) $272,500.
D) $418,000.