Barger Company Had the Following Information at December 31: Finished $1 \quad \$ 90,000$

question 112

Multiple Choice

Barger Company had the following information at December 31: Finished goods inventory, January $1 \quad \$ 90,000$
Finished goods inventory December $31 \quad 126,000$ If the cost of goods manufactured during the year amounted to $1,895,000 and annual sales were $2,994,000, how much is the amount of gross profit for the year?

• A)$1,099,000
• B)$1,009,000
• C)$1,859,000
• D)$1,135,000

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Definitions:

Process Costing

Process costing is a cost accounting method used for homogeneous products, where the costs are assigned to batches of products instead of individual units.

Conversion Costs

The sum of labor and overhead expenses required to convert raw materials into finished products.

Equivalent Units

Equivalent Units are a concept in cost accounting used to represent the amount of work done during a period, expressed in fully completed units of output.

Cost Reconciliation

The process of ensuring that the costs recorded in the accounting system match the actual expenses incurred, especially in a manufacturing or production process.