The Total of Wage Expense to Employees for the Year

question 13

Multiple Choice

The total of wage expense to employees for the year was $600,000.Wages payable to employees at the beginning of the year were $10,000 and at the end of the year $15,000.Wage expense resulted in cash outflows of?

• A) $595,000
• B) $600,000
• C) $605,000
• D) $610,000

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Definitions:

Conversion Cost

The combination of labor and manufacturing overhead costs required to convert raw materials into finished goods.

Conversion Costs

The combined costs of direct labor and manufacturing overhead, which are incurred to convert raw materials into finished goods.

FIFO Method

"First In, First Out," an inventory valuation method where goods first purchased or produced are sold first, affecting inventory cost and profits.

Process Costing

An accounting method used where costs are accumulated for a continuous process and then assigned to individual units of output.