The Following Information Was Provided by Grand Company for the Year

question 78

Multiple Choice

The following information was provided by Grand Company for the year just ended: $$\begin{array} { | l | r | } \hline \text { Beginning finished goods inventory } & \$ 130,425 \\\hline \text { Ending finished goods inventory } & \$ 125,770 \\\hline \text { Sales } & \$ 500,000 \\\hline \text { Gross margin } & \$ 100,000 \\\hline\end{array}$$ The cost of goods manufactured for the year was:

• A)$395,345.
• B)$404,655.
• C)$104,655.
• D)$95,345.

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Definitions:

Equivalent Unit

A concept in cost accounting used to apportion costs to partially completed goods, treating them as a fraction of a fully completed unit.

Process Costing System

An accounting methodology used to allocate costs to units of product in continuous processes or industries where the products are indistinguishable from each other.

Weighted-Average Method

An inventory costing method that calculates the cost of goods based on the average cost of all similar items in inventory.

Processing Department

A specific department within a manufacturing facility where a particular stage of the production process is carried out.