Reference: 03-10
Summit Company Has Provided the Following Inventory Balances

question 96

Multiple Choice

Reference: 03-10
Summit Company has provided the following inventory balances and manufacturing cost data for the month of
January: $$\begin{array}{l}\begin{array} { | c | l | l | } \hline \text { Inventories: } & \text { January 1 } & \text { January 31 } \\\hline \text { Direct materials } & \$ 30,000 & \$ 40,000 \\\hline \text { Work in process } & \$ 15,000 & \$ 20,000 \\\hline \text { Finished goods } & \$ 65,000 & \$ 50,000 \\\hline\end{array}\\\\\begin{array} { | l | l | } \hline & \text { Month of January } \\\hline \text { Cost of goods manufactured } & \$ 515,000 \\\hline \text { Manufacturing overhead applied } & \$ 150,000 \\\hline \text { Direct materials used } & \$ 190,000 \\\hline \text { Actual manufacturing overhead } & \$ 144,000 \\\hline\end{array}\end{array}$$ Under Summit's job-order costing system, any overapplied or underapplied overhead is closed to the Cost of
Goods Sold account at the end of the calendar year .
-What was the total amount of direct material purchases during January?

• A)$195,000.
• B)$180,000.
• C)$190,000.
• D)$200,000.

Investigate the role of cost functions in determining the number of firms in an industry.

Understand the production process and budget constraints' effect on output levels in agricultural and livestock production.

Understand the concept of demand functions and how they relate to price and quantity.

Calculate profit maximization levels for different production and cost scenarios.

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Definitions:

Expectations

Beliefs or forecasts about future events or behaviors based on past experiences or societal norms.

Behavior

The behavior or response of people or groups when they encounter stimuli that are either internal or external.

Golem Effect

A psychological phenomenon where lower expectations placed upon individuals lead to poorer performance outcomes, contrasting the Pygmalion effect.

Progress Report

A document or update that outlines the development or state of a project at a certain point in time.