Karim Corporation Uses a Standard Cost System in Which Inventories

question 376

Multiple Choice

Karim 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 started and completed 31,500 units. Direct labor employees worked 23,650 hours at an average cost of $19.50 per hour.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 direct labor costs, the Work in Process inventory account will increase (decrease) by:

• A) $474,075
• B) ($474,075)
• C) ($461,175)
• D) $461,175

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Definitions:

Mercury

A chemical element with the symbol Hg and atomic number 80, known for being a dense, silver liquid metal at room temperature.

Industrial Production

The measure of the output of the industrial sector of the economy, which includes manufacturing, mining, and utilities.

Birth Defects

Congenital abnormalities that are present at birth and can result in physical, mental, or metabolic dysfunctions, often leading to disability or death.

First Stage

Refers to the initial phase of a process or development, often marked by early or beginning steps.