Turkey Farms Disburses Checks Every Four Weeks That Have an Average

question 66

Multiple Choice

Turkey Farms disburses checks every four weeks that have an average total of $68,900 each which take 3.4 days to clear. How much interest can the company earn annually if it delays transfer of funds from an interest-bearing account that pays .014 percent per day while the payments clear? Ignore the effects of compound interest. Assume each year has exactly 52 weeks.

• A) $33
• B) $87
• C) $131
• D) $364
• E) $426

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Definitions:

Total Manufacturing Costs

The aggregate of all costs associated with the production of goods, including direct materials, direct labor, and manufacturing overhead.

Materials Used in Production

The raw materials and components that are consumed in the manufacturing process to produce finished goods.

Perpetual Inventory Records

This is an inventory management system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Direct Materials

Raw materials that are traceable to the manufacturing of a product and are an integral part of the finished product.