A Government Was Billed $3,000,000 During the Year on Its

question 29

Multiple Choice

A government was billed $3,000,000 during the year on its capital project, of which $2,700,000 was paid. The total contracted cost is $5,200,000. The government does not plan to pay the $300,000 balance currently owed to the contractor until the project has been completed and approved. The government should report Capital Projects Fund expenditures for the current year equal to

• A) $2,700,000.
• B) $3,000,000.
• C) $4,900,000.
• D) $5,200,000.

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Definitions:

Factory Overhead

Costs associated with operating a factory that are not directly tied to the production of goods, such as utilities, maintenance, and management salaries.

Work in Process

The cost of unfinished goods in the manufacturing process including labor, raw materials, and overhead.

Finished Goods

Products that have completed the manufacturing process and are ready to be sold or distributed to customers.

Cost Ledger

A subsidiary ledger that records the details of costs associated with the production of goods or services, often part of a larger accounting system.