Johanson Corporation Uses a Standard Cost System in Which Inventories

question 451

Multiple Choice

Johanson Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. The standard cost card for the company's only product is as follows: During the year, the company purchased 89,600 pounds of raw material at a price of $7.80 per pound and used 79,120 pounds of the raw material to produce 23,300 units of work in process.Assume that all transactions are recorded on a worksheet as shown in the text. On the left-hand side of the equals sign in the worksheet are columns for Cash, Raw Materials, Work in Process, Finished Goods, and Property, Plant, and Equipment (net) . All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings.When recording the raw materials purchases, the Raw Materials inventory account will increase (decrease) by:

• A) $698,880
• B) ($716,800)
• C) ($698,880)
• D) $716,800

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Definitions:

Intoxication

A temporary state of impaired physical and mental functioning due to the consumption of alcohol or drugs.

American Psychiatric Association

A professional organization of psychiatrists in the United States, dedicated to ensuring humane care and effective treatment for all persons with mental disorders.

Substance Use Disorder

A condition characterized by an uncontrolled use of substances despite harmful consequences.

Moderately Intoxicated

A state of being under the influence of alcohol or other substances to a degree that is noticeable but not severe or extreme.