If the Factory Labor Cost for a Month Was $123,000

question 99

True/False

If the factory labor cost for a month was $123,000 (paid in cash),the following journal entry would be recorded by the process cost accounting system:
Factory Payroll………………………………….. 123,000
Cash…………………………………….. 123,000

Understand the concept of quantity discounts and their impact on inventory decisions.

Grasp the significance of safety stock in mitigating stockout risks and how to calculate it.

Recognize the application and implications of single-period inventory models.

Comprehend different inventory systems and terminology used in inventory management.

---

Definitions:

Ending inventory

The total value of goods available for sale at the end of an accounting period after all sales transactions have been accounted for.

Current prices

Prices at which goods and services are being sold in the present market, reflecting the current economic conditions.

LIFO

The "last in, first out" method of inventory valuation, where the most recently acquired items are considered sold first, used in periods of inflation to increase cost of goods sold and reduce taxes.

Periodic inventory system

An inventory accounting system where updates to inventory accounts are made periodically, typically at the end of a financial period, rather than after each transaction.