Kern Corporation Produces a Single Product

question 291

Multiple Choice

Kern Corporation produces a single product. Selected information concerning the operations of the company follow: Assume that direct labor is a variable cost.Under absorption costing, the value of the ending finished goods inventory would be:

• A) $7,200
• B) $7,650
• C) $8,000
• D) $9,700

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Definitions:

Cash Payments Journal

The special journal in which all cash payments are recorded.

Account Receivable

Money owed to a company by its debtors for goods or services that have been delivered or sold but not yet paid for.

Subsidiary Ledgers

Detailed ledgers that provide a breakdown of individual accounts that are summarized in the general ledger.

Customers Ledger

A subsidiary ledger containing individual accounts for customers, showing each customer's sales, payments, returns, and the current balance owed.