ABC Company Uses a Materials Inventory Account to Record Both

question 52

Multiple Choice

ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to WIP, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information: $\begin{array}{lr}\text { Total materials (direct and indirect) purchased } & \$ 90,000 \\\text { Indirect materials issued to production } & 30,000 \\\text { Total materials issued to production } & 110,000 \\\text { Beginning materials inventory } & 50,000\end{array}$ The debit to the Factory Overhead account is:

• A)$110,000.
• B)$30,000.
• C)$90,000.
• D)$80,000.
• E)$50,000.

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Definitions:

Risk Sharing and Transfer Agreements

Contracts where two or more parties agree to distribute among themselves the losses or benefits arising from particular risks.

Monte Carlo Simulation

A computational algorithm that uses repeated random sampling to obtain numerical results, typically used to assess risk and uncertainty in prediction and modeling.

Contingency Funds

Reserved money set aside by organizations or projects to address unforeseen events or emergencies that may incur additional costs.

Risk Profile

A risk profile is a quantified analysis of the types of threats an organization, asset, project, or individual faces, focusing primarily on the risk exposure level.