Figure 10-9

question 50

Multiple Choice

Figure 10-9. James Company manufactures t-shirts.During the year,it manufactured 250,000 t-shirts,using 2 hours of direct labor at a rate of $8.50 per hour.The materials and labor standards for manufacturing the t-shirts are:
It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts.
Refer to Figure 10-9.What is the entry to record the issuance and usage of materials?

• A)Work in Process 4,500,000 Materials Usage Variance 300,000 Materials 4,800,000
• B)Work in Process 4,200,000 Materials Usage Variance 300,000 Materials 4,500,000
• C)Work in Process 4,200,000 Materials Usage Variance 300,000 Materials 3,900,000
• D)Work in Process 4,500,000 Materials Usage Variance 300,000 Materials 4,200,000

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Definitions:

Invested Assets

Assets that are purchased or acquired for the purpose of generating income or appreciating in value, such as stocks, bonds, and real estate.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and losses from total revenue, indicating the firm's profitability over a specific period.

Investment Turnover

A measure of the efficiency with which a company or portfolio generates revenue from its investments, calculated as sales divided by average invested assets.

Return On Investment

An evaluation tool for assessing the profit or efficiency of an investment, which involves dividing the investment's net profit by its cost.