At the End of the Period, Massive Designs Had the Following

question 87

Multiple Choice

At the end of the period, Massive Designs had the following debit balances in its accounts. $$\begin{array} { l r } \text { Raw Materials Inventory } & \$ 20,000 \\\text { Work in Process Inventory } & 40,000 \\\text { Finished Goods Inventory } & 60,000 \\\text { Cost of Goods Sold } & 400,000 \\\text { Manufacturing Overhead } & 8,000\end{array}$$ Assuming the amount in Manufacturing Overhead is considered material, the entry to allocate Manufacturing Overhead will include a

• A) debit to Cost of Goods Sold for $6,400.
• B) debit to Cost of Goods Sold for $8,000.
• C) debit to Cost of Goods sold for $6,154.
• D) credit to Work in Process Inventory for $6,400.

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Definitions:

Cost Behaviours

The relationship between costs and changes in business activity levels, including fixed, variable, mixed, and step costs.

Cost Driver

A factor that causes a change in the cost of an activity, serving as a basis for allocating costs in activity-based costing.

Relationship

The connection or association between two or more entities, often referring to business partnerships or customer interactions.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behaviors hold true.