In June, One of the Processing Departments at Furbush Corporation

question 29

Multiple Choice

In June, one of the processing departments at Furbush Corporation had ending work in process inventory of $13,000. During the month, $414,000 of costs were added to production and the cost of units transferred out from the department was $436,000.In the department's cost reconciliation report for January, the cost of beginning work in process inventory for the department would be:

• A) $35,000
• B) $423,000
• C) $9,000
• D) $401,000

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Definitions:

Prime Cost

The sum of direct materials cost and direct labor cost, representing the direct production costs.

Cost Structure

The composition of different types of costs within a company or specific project, often categorized into fixed and variable costs.

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can then be used to cover fixed costs and contribute to profit.

Product Mix

The variety of products that a company produces or sells, considering the diversity in type, size, and quality.