Robnett Corporation Manufactures One Product

question 52

Multiple Choice

Robnett Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows:
During the year, the company completed the following transactions:
a. Purchased 106,900 liters of raw material at a price of $6.80 per liter.
b. Used 93,760 liters of the raw material to produce 24,700 units of work in process.
Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation.

-When recording the raw materials purchases in transaction (a) above,the Raw Materials inventory account will increase (decrease) by:

• A) $726,920
• B) ($694,850)
• C) ($726,920)
• D) $694,850

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Definitions:

External Attribute

Characteristics or features of a product or service that can be observed and measured by users or customers, distinct from internal workings.

Parent Organization

The main or controlling company in a corporate group that owns or controls subsidiary companies.

Business Purpose

The fundamental reasons for the existence of a business or a project, often defining what it seeks to achieve or the value it aims to provide to stakeholders.

Resources

Assets, materials, or other items of value that can be used to accomplish a goal or project.