Tierney Construction, Inc Direct Labor Cost Incurred During the Period Amounted to 2

question 90

Multiple Choice

Tierney Construction, Inc. recently lost a portion of its financial records in an office theft. The following accounting information remained in the office files: $\begin{array}{lr}\text { Cost of goods sold } & \$ 80,000 \\\text { Work in process inventory, January 1, 2016 } & 18,500 \\\text { Work in process inventory, December 31, 2016 } & 14,500 \\\text { Selling and Administrative Expenses } & 16,000 \\\text { Net Income } & 30,000\\\text { Factory overhead } & 20,000 \\\text { Direct materials inventory, January 1, 2016 } & 26,000 \\\text { Direct materials inventory, December 31, 2016 } & 14,000 \\\text { Cost of goods manufactured } & 98,000 \\\text { Finished goods inventory, January 1, 2016 } & 31,000\end{array}$ Direct labor cost incurred during the period amounted to 2.5 times the factory overhead. The CFO of Tierney Construction, Inc. has asked you to recalculate the following accounts and to report to him by the end of tomorrow.
What should be the amount of direct materials purchased?

• A)$28,000.
• B)$19,000.
• C)$15,000.
• D)$12,000.

---

Definitions:

Seed

The reproductive unit of angiosperms and gymnosperms, capable of developing into another such plant.

Vascular Plants

Plants that possess specialized tissues, xylem and phloem, for water and nutrients transportation throughout the organism.

Seeds

Plant embryos enclosed in a protective outer covering, capable of developing into a new plant.

Gymnosperms

A group of seed-producing plants that includes conifers, cycads, Ginkgo, and gnetophytes, distinguished by not having flowers or fruit.