Benson Inc During 2017 Benson Purchased $1450000 of Raw Materials Incurred Direct

question 184

Multiple Choice

Benson Inc.'s accounting records reflect the following inventories: $$\begin{array} { l c c } & \text { Dec. 31,2016 } & \text { Dec. 31, 2017 } \\\text { Raw materials inventory } & \$ 80,000 & \$ 64,000 \\\text { Work in process inventory } & 104,000 & 116,000 \\\text { Finished goods inventory } & 100,000 & 92,000\end{array}$$ During 2017 Benson purchased $1450000 of raw materials incurred direct labor costs of $250000 and incurred manufacturing overhead totaling $160000. Assume Benson's cost of goods manufactured for 2017 amounted to $1660000. How much would it report as cost of goods sold for the year?

• A) $1668000
• B) $1568000
• C) $1760000
• D) $1652000

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Definitions:

Unrealized Loss

A loss that results from holding an asset that has decreased in value, but the asset has not yet been sold.

Deferred Tax Asset

This asset arises when a company pays more taxes to the government than it currently owes in its financial statements, to be used for future tax relief.

Pre-Tax Income

Earnings before taxes (EBT), calculated as a company's total revenues minus expenses, excluding income taxes, during a reporting period.

Realized Gain

The profit earned from selling an asset for more than its purchase price, indicating a successful investment.