Reference:
Frosting Corp -What Was the Amount of Raw Materials Used in Production

question 67

Multiple Choice

Reference:
Frosting Corp. has provided the following relating to the most recent month (August 31, 2016) of operations, for their main product, cupcakes $$\begin{array} { l r } \text { Baker's salaries } & 20,000 \\\text { Finished goods inventory, beginning } & 18,000 \\\text { Finished goods inventory, ending } & 20,000 \\\text { General \& administrative expenses } & 20,000 \\\text { Indirect materials } & 17,500 \\\text { Production Supervisor, Salary } & 21,000 \\\text { Purchases of raw materials } & 28,000 \\\text { Raw materials inventory, ending } & 19,000 \\\text { Raw materials inventory, beginning } & 18,000 \\\text { Rent on production factory } & 19,000 \\\text { Rent, retail store } & 18,000 \\\text { Sales } & 243,000 \\\text { Utilities on production factory } & 17,500 \\\text { Utilities, retail store } & 17,000 \\\text { Wages, retail staff } & 20,000 \\\text { WIP inventory, beginning } & 19,500 \\\text { WIP inventory, ending } & 21,500\end{array}$$
-What was the amount of raw materials used in production?

• A)$27,000
• B)$28,000
• C)$46,000
• D)$18,000

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Definitions:

Real Assets

Physical or tangible assets that have value due to their substance and properties, such as land, buildings, and machinery.

Commercial Banks

Financial institutions that offer a wide range of banking services to individuals and businesses, including deposit accounts, loans, and other services.

Efficient Market

A market in which asset prices fully reflect all available information, making it impossible to consistently achieve higher returns.

Investment Strategy

A plan for allocating assets among various investment types to achieve specific financial goals, taking into account the investor's risk tolerance and time horizon.