Conrad, Inc Direct Labor Cost Incurred During the Period Amounted to 1

question 19

Multiple Choice

Conrad, Inc. recently lost a portion of its records in an office fire. The following information was salvaged from the accounting records. $\begin{array}{lr}\text { Cost of Goods Sold } & \$ 65,000 \\\text { Work-in-Process Inventory, Beginning } & 10,500 \\\text { Work-in-Process Inventory, Ending } & 9,000 \\\text { Selling and Administrative Expense } & 15,000 \\\text { Finished Goods Inventory, Ending } & 15,000 \\\text { Finished Goods Inventory, Beginning } & ?\\\text { Direct Materials Used } & ? \\\text { Factory Overhead Applied } & 12,000 \\\text { Operating Income } & 14,000 \\\text { Direct Materials Inventory, Beginning } & 11,000 \\\text { Direct Materials Inventory, Ending } & 6,000 \\\text { Cost of Goods Manufactured } & 60,000\end{array}$ Direct labor cost incurred during the period amounted to 1.5 times the factory overhead. The CFO of Conrad, Inc. has asked you to recalculate the following accounts and to report to him by the end of the day.
What is the amount of net sales?

• A)$68,500.
• B)$94,000.
• C)$72,500.
• D)$75,000.

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Definitions:

Activity-based Costing System

A method of accounting that allocates costs to specific activities, such as product design or customer service, enabling more accurate product cost assessments.

Volume Of Production

The total number of units produced within a given period by a manufacturing entity.

Traditional Costing Systems

Costing methods that allocate overhead costs based on a predetermined rate, often using direct labor hours or machine hours as the allocation base.

Activity-based Costing System

An activity-based costing system is an accounting method that assigns costs to products or services based on the activities and resources that go into production, providing more accurate cost information.