Selected Data Concerning the Past Year's Operations of the Motor

question 57

Multiple Choice

Selected data concerning the past year's operations of the Motor City Corporation are as follows: $\begin{array}{lr}\text { Selling and administrative expenses } & \$ 225,000 \\\text { Direct materials used } & 467,500 \\\text { Direct labor ( } 50,000 \text { hours) } & 450,000 \\\text { Factory overhead aplication rate } & 8 \text { per DLH }\end{array}$

$\text { Inventories }$
$\begin{array}{lrr}&\text { Beginning } &\text { Ending }\\\hline\text { Direct material } & \$ 75,000 & \$ 67,500 \\\text { Work in process } & 112,500 & 135,000 \\\text { Finished goods } & 60,000 & 37,500\end{array}$

The cost of direct materials purchased is

• A)$467,500.
• B)$460,000.
• C)$437,500.
• D)$445,000.

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Definitions:

Fixed Monthly Payments

Regular, unchanging payments made each month for a period of time, often used in loans and lease agreements.

Promissory Note

An investment vehicle that features a concrete promise by one entity to pay a definitive money amount to another, either upon solicitation or on a specified date.

Legal Due Date

The specific date by which a legal obligation must be satisfied, such as the payment of debts or completion of contractual duties.

Principal

The original sum of money borrowed in a loan or the amount of the investment.