McArthur Company Has Gathered the Following Data Related to Its

question 86

Multiple Choice

McArthur Company has gathered the following data related to its production process of two of its products for the week ended April 30:
$\begin{array}{lrrrr}\text { Model } & \text { Item \#B200 } & \text { Item \#C440 }\\\text { Quantity produced } & 60 & 100 \\\text { Unit-related material costs } & \$ 42,000 & \$ 100,000 \\\text { Variable conversion costs } & 72,000 & 300,000\\\text { Total direct costs } & \$ 114,000 & \$ 400,000 \\\text { Indirect costs: } & & & \\\text { Indirect manufacturing costs } & 163,200 & 272,000 \\\text { Indirect operating costs } & 255,000 & 425,000\\\text { Total indirect costs } & 418,200 & 697,000 \\\text { Total cost}& \$ 532,200 & \$ 1,097,000\end{array}$
The costs above that appear to be allocated rather than traced are:

• A) Unit-related material costs.
• B) Variable conversion costs.
• C) Indirect manufacturing costs only.
• D) All indirect costs.

Understand how noncash investing and financing activities are reported.

Interpret the impact of transactions on cash flows and the financial position of a company.

Recognize how the direct and indirect methods for cash flows from operating activities are applied.

Identify the role of spreadsheets in preparing financial statements.

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Definitions:

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