Use the Following Information for the Next 2 Questions

question 102

Multiple Choice

Use the following information for the next 2 questions.
Major Foods, Inc. produces a cereal from oat grain. The company buys unprocessed oats for $400 per ton. It costs $60 per ton to send the oats through a processor, which produces 1,900 pounds of pure oats and 100 pounds of oat shells. The oat shells are ground and packaged at a cost of $100 per hundred pounds. They are sold to a poultry feed company for $3 per pound. The pure oats are cooked and packaged into 4-pound containers at a cost of $350. The packaged oats are sold for $2 per 4-pound container.
-If Major uses the net realizable value method, the gross profit from the oat shells is

• A) $185
• B) $200
• C) $85
• D) $215

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Definitions:

Sarbanes-Oxley Act

U.S. law enacted in 2002 aimed at enhancing corporate governance and strengthening regulations on accounting and auditing to protect investors from fraudulent financial reporting.

Values

Positive abstractions that capture our sense of what is good and desirable.

Whistle-Blowers

Individuals who expose illegal or unethical activities within an organization to the public or to those in power.

Sarbanes-Oxley Act

A federal law enacted in 2002 to improve corporate governance, prevent fraud, and enhance the accuracy and reliability of financial reporting by corporations.