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:

Big Raise

A significant increase in salary or wage, usually reflecting recognition of an individual's performance or value to an organization.

Atomic Components

The single, indivisible units or elements that make up a complex structure, emphasizing the simplest parts of a system.

Atomic Statements

Simple, indivisible statements in logic that do not contain any logical connectives.

Connectives

Logical operators used in sentences to connect propositions or statements, indicating relationships like conjunction, disjunction, or implication.