Ink Technology's Work in Process Inventory Account Has a Beginning

question 7

Multiple Choice

Ink Technology's Work in Process Inventory account has a beginning balance of $50,000 and an ending balance of $40,000.Direct materials used are $70,000 and direct labor incurred totals $35,000.Cost of goods sold totals $135,000.Manufacturing overhead applied is $20,000.How much is cost of goods manufactured?

• A)$145,000
• B)$115,000
• C)$125,000
• D)$135,000

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Definitions:

Goodwill

An intangible asset representing the excess of the purchase price over the fair market value of an acquired company’s net assets.

Cost Method

An accounting method used to record investments at their original purchase cost, with any changes recognized only when dividends are received or upon sale of the investment.

Fair Value

The amount one would get for selling an asset or the cost to transfer a liability in a regulated exchange among market players on the date of valuation.

Impairment Loss

A recognized reduction in the recoverable amount of a fixed asset or goodwill, indicating that it exceeds its recoverable amount.