Dolan Company's Accounting Records Reflect the Following Inventories During 2013, $600,000 of Raw Materials Were Purchased, Direct Labor

question 63

Multiple Choice

Dolan Company's accounting records reflect the following inventories: $\begin{array}{lrr}&\text { Dec. } 31,2013&\text { Dec. } 31,2012\\\text { Raw materials inventory } & \$ 310,000 & \$ 260,000 \\\text { Work in process inventory } & 300,000 & 160,000 \\\text { Finished goods inventory } & 190,000 & 150,000\end{array}$ During 2013, $600,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000.
- Dolan Company's total manufacturing costs incurred in 2013 amounted to

• A)$1,530,000.
• B)$1,490,000.
• C)$1,390,000.
• D)$1,580,000.

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Definitions:

Marginal Social Benefit

Marginal social benefit is the additional gain to society as a whole from producing one more unit of a good or service.

Emissions Tax

A tax levied on the emission of pollutants, aimed at reducing the level of harmful emissions released into the environment.

Catalytic Converter

An emissions control device that converts toxic gases and pollutants in exhaust gas from an internal combustion engine into less-toxic pollutants.

Pollution Capacity

The ability of a natural environment to absorb, break down, or otherwise neutralize pollutants without suffering detrimental effects.