As a Result of a Thorough Physical Inventory Greeley Company

question 127

Multiple Choice

As a result of a thorough physical inventory Greeley Company determined that it had inventory worth $325000 at December 31 2016. This count did not take into consideration the following facts: Walker Consignment currently has goods worth $47000 on its sales floor that belong to Greeley but are being sold on consignment by Walker. The selling price of these goods is $75000. Greeley purchased $22000 of goods that were shipped on December 27. FOB destination that will be received by Greeley on January 3. Determine the correct amount of inventory that Greeley should report.

• A) $325000.
• B) $347000.
• C) $372000.
• D) $387000.

---

Definitions:

Indirect Material

Materials used in the manufacturing process that are not directly incorporated into the final product, such as lubricants and cleaning supplies.

Direct Labor

The labor costs directly associated with the manufacturing of products, including wages of workers who are actively involved in the product's creation.

Direct Materials

Raw materials that can be directly attributed to the production of a product and are an essential part of the finished product.

Factory Overhead

All indirect costs incurred during the manufacturing process, excluding the costs of direct labor and materials.