Flat Company Uses a Backflush-Costing System to Produce Bicycles

question 96

Multiple Choice

Flat Company uses a backflush-costing system to produce bicycles.Bicycles are scheduled for production only after orders are recorded, and products are shipped to customers immediately upon completion.No finished goods inventory is maintained and product costs are applied directly to cost of goods sold.Standard cost for materials and conversion is $150 and $75, respectively. During the current month, Flat purchased $9,000 of direct materials and incurred $5,300 in conversion cost to produce 40 units.The entry to record the purchase of materials includes a debit to _____.

• A)Materials Inventory
• B)Work-in-Process Inventory
• C)Finished-Goods Inventory
• D)Cost of Goods Sold

Identify the condition under which a firm should continue to operate or shut down in the short run based on price and cost analysis.

Understand the role of marginal cost in determining a perfectly competitive firm's short-run supply curve.

Recognize the short-run economic outcomes for a firm in a perfectly competitive market, including earning zero economic profit, making a loss, or earning a profit.

Understand the components and responses of the stress system, including physical, emotional, cognitive, and psychological reactions.

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Definitions:

Sentencing Court

A court that has the authority to determine and impose punishment on individuals convicted of crimes.

Federal Antitrust Laws

Laws designed to protect trade and commerce from unfair practices such as monopoly, price fixing, and other forms of market manipulation.

Sherman Act

A landmark federal statute in the antitrust law of the United States that prohibits monopolistic practices and promotes competition.

Relevant Market

The specific market segment in which a particular product or service competes, taking into consideration the product's substitute and the competition within this arena.