Woodhead Inc

question 23

Multiple Choice

Woodhead Inc. manufactures one product. It does not maintain any beginning or ending inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. Its standard cost per unit produced is $37.45. During the year, the company produced and sold 24,400 units at a price of $47.40 per unit and its selling and administrative expenses totaled $92,000. The company does not have any variable manufacturing overhead costs. It recorded the following variances during the year:

-The adjusted Cost of Goods Sold after closing all of the variances to Cost of Goods Sold will be closest to:

• A) $913,780
• B) $1,190,385
• C) $947,605
• D) $879,955

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Definitions:

Usage of Trade

Customary practices and usages that parties to a transaction in a particular trade commonly observe.

Commercial Dealing

Activities involved in the purchase and sale of goods and services in the marketplace.

Industry

The economic activity concerned with the production of goods, services, and the extraction of raw materials.

Requirements Contract

An agreement in which one party agrees to purchase all of his or her requirements of a particular product from another party. See also output contract.