The Falcon Company Does Not Maintain Backup Documents for Its

question 53

Multiple Choice

The Falcon Company does not maintain backup documents for its computer files. In June, some of the current data were lost, and you have been asked to help reconstruct the data. The following beginning balances on June 1 are known:
$\begin{array}{lr}\text { Direct Materials Inventory } & \$ 12,000 \\\text { Work-in-Process Inventory } & 4,500 \\\text { Finished Goods Inventory } & 11,000 \\\text { Manufacturing Overhead Control } & 16,500 \\\text { Accounts Payable } & 6,000\end{array}$

Reviewing old documents and interviewing selected employees have generated the following additional information:
The production superintendent's job cost sheets indicated that materials of $2,600 were included in the June 30 Work-in-Process Inventory. Also, 300 direct labor-hours had been paid at $6.00 per hour for the jobs in process on June 30.
The Accounts Payable account is only for direct material purchases. The clerk remembers clearly that the balance in the Accounts Payable on June 30 was $8,000. An analysis of canceled checks indicated payments of $40,000 were made to suppliers during June.
Payroll records indicate that 5,200 direct labor-hours were recorded for June. It was verified that there were no variations in pay rates among employees during June.
Records at the warehouse indicate that the Finished Goods Inventory totaled $16,000 on June 30.
Another record kept manually indicates that the Cost of Goods Sold in June totaled $84,000.
The predetermined overhead rate was based on an estimated 60,000 direct labor-hours for the year and an estimated $180,000 in manufacturing overhead costs.
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What is the Cost of Goods Manufactured for June?

• A) $89,000.
• B) $84,000.
• C) $94,000.
• D) $99,000.

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Definitions:

Abstract Reasoning

Abstract reasoning involves the ability to think about objects, principles, and ideas that are not physically present.

Middle Childhood

A developmental stage typically covering the period from about 6 to 12 years old, where children experience major growth in cognitive, physical, and social skills.

Static Reasoning

A characteristic of preoperational thought in which a young child thinks that nothing changes. Whatever is now has always been and always will be.

Concrete Operational

A stage of cognitive development in children, proposed by Piaget, occurring roughly between the ages of 7 and 12, during which children gain a better understanding of mental operations and physical concepts.