In Completing the Ending Finished Goods Inventory Budget, the Managers

question 25

Multiple Choice

In completing the Ending Finished Goods Inventory Budget, the managers of Jimbob Co. have determined that there should be 5,000 units of finished goods inventory on hand at the end of the budgeted period. In preparing other budgets they have used the following estimates of quantities and costs required to complete one unit: $$\begin{array} { | l | l | l | } \hline & \text { Quantity } & \text { Cost } \\\hline & & \\\hline \text { Direct materials } & 10.0 \text { kilograms } & \$ 1.00 \text { per kilogram } \\\hline \text { Direct labour } & .50 \text { hours } & \$ 20.00 \text { per hour } \\\hline\end{array}$$ Manufacturing overhead is allocated at the rate of $5.00 per direct labour hour. Using the above data, the ending finished goods inventory should be:

• A)$200,000.
• B)$150,000.
• C)$112,500.
• D)$100,000.

---

Definitions:

Transfer of Assets

The act of moving ownership of assets from one party to another, which could involve selling, gifting, or exchanging.

Ledger

A book or collection of financial accounts where all transaction records for a business are maintained.

Specific Asset

An identifiable and tangible asset that is required or utilized for a particular function or project.

Decreases

A decrease refers to a reduction in the size, amount, or number of something.