Wilma Company Uses a Job- Order- Cost System and Had

question 52

Multiple Choice

Wilma Company uses a job- order- cost system and had the following data available: $\begin{array}{ll}\text { Beginning direct-materials inventory } & \$ 26,000 \\\text { Beginning WIP inventory } & 64,000 \\\text { Beginning finished-goods inventory } & 58,000 \\\text { Direct materials purchased on account } & 148,000 \\\text { Direct materials requisitioned } & 82,000\\\text { Direct-labor cost incurred } & 130,000 \\\text { Factory overhead incurred } & 146,000 \\\text { Cost of goods completed } & 292,000 \\\text { Cost of goods sold } & 256,000 \\\text { Overhead application rate } & 125 \%\end{array}$ (as a percent of direct- labor cost) The journal entry to record the cost of goods completed would include a:

• A) debit to WIP Inventory for $256,000
• B) credit to Cost of Goods Sold for $256,000
• C) credit to Finished- Goods Inventory for $292,000
• D) credit to WIP Inventory for $292,000

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Definitions:

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved, leading to a misallocation of resources.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers at various price levels.

Consumer Surplus

The divergence between the aggregate amount consumers are willing and have the means to pay for a good or service, and what they truly pay.

Producer Surplus

The disparity between what sellers are ready to take for a product or service and the actual amount they get.