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.

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Definitions:

Protect

To guard or defend something or someone from harm, damage, or potential threats.

Organizational Barriers

Hindrances within a company that prevent effective communication, decision-making, and processes.

Whistle Blowing

Involves an employee or former employee of an organization calling public attention to serious wrongdoing or danger within the organization.

Moral Quality Circles

Groups focused on identifying, discussing, and solving ethical issues in the workplace to promote integrity and moral behavior.