The Allen Company Has the Following Information for the Assembly

question 116

Multiple Choice

The Allen Company has the following information for the Assembly Department for the month of October: $\begin{array}{lr}\text { Materials purchased } & 45,000 \\\text { Materials used } & 49,000 \\\text { Direct labor } & 30,000 \\\text { Actual manufacturing overhead } & 56,000 \\\text { Cost of goods completed and transferred to the Finishing Dept. } & 125,000\end{array}$ Overhead rate is 200 percent of direct labor costs. Allen Company uses a process costing system for the Assembly Department.
What is the total amount of debits to Work in Process-Assembly Department for October?

• A)$125,000
• B)$131,000
• C)$139,000
• D)$109,000

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Definitions:

Marginal Revenue

The additional revenue that a company earns from selling one more unit of a product or service.

Marginal Cost

The rise in expense associated with the production of an extra unit of a product or service.

Average Variable Cost

The total variable cost divided by the quantity of output produced; it measures the variable cost per unit of output.

Average Total Cost

The per unit cost of production, calculated by dividing the total costs by the quantity of output produced.