X-Industries Manufactures 3-D Printers

question 14

Multiple Choice

X-Industries manufactures 3-D printers. For each unit, $3,400 of direct material is used and there is $2,600 of direct manufacturing labor at $16 per hour. Manufacturing overhead is applied at $20 per direct manufacturing labor hour. Calculate the profit earned on 46 units if each unit sells for $9,500.

• A) $65,320
• B) $35,880
• C) $11,500
• D) $3,250

Calculate and understand the treatment of intra-entity gross profit and its impact on consolidated net income.

Recognize the adjustments necessary for intra-entity sales of inventory in preparing consolidated financial statements.

Identify the effects of the equity method of accounting on consolidation, particularly with regards to intra-entity transactions.

Understand the consolidation process including the elimination of intra-entity transactions.

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