Sarah Receives a $15,000 Scholarship from City University

question 800

Multiple Choice

Sarah receives a $15,000 scholarship from City University. The university specifies that $8,000 is for tuition, books, supplies, and equipment for classes. The other $7,000 is for room and board. Sarah works ten hours per week as a grader, for which she is paid $7,500 for the year. Of the total amount received, Sarah must include the following amount in gross income

• A) $7,500.
• B) $22,500.
• C) $14,500.
• D) $7,000.

---

Definitions:

Equivalent Units

A concept used in cost accounting to express the amount of work done on units of production in terms of fully completed units.

Conversion Costs

The costs required to convert raw materials into finished products, typically including labor and overhead.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all goods available for sale.

Conversion Costs

The expenses incurred in the process of converting raw materials into finished products, typically including labor and overhead costs.