Darke Corporation Makes One Product and Has Provided the Following

question 53

Multiple Choice

Darke Corporation makes one product and has provided the following information:
A.Budgeted unit sales for October,November,and December are 7,600,9,000,and 10,100 units respectively.
B.The ending finished goods inventory equals 40% of the following month's sales.
C.Each unit of finished goods requires 5 pounds of raw materials.The raw materials cost $1.00 per pound.
D.The direct labor wage rate is $19.00 per hour.Each unit of finished goods requires 3.0 direct labor-hours.
E.Manufacturing overhead is entirely variable and is $11.00 per direct labor-hour.
The estimated finished goods inventory balance at the end of November is closest to:

• A) $294,920
• B) $383,800
• C) $133,320
• D) $250,480

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Definitions:

Escrow Agent

A neutral third party responsible for holding and distributing funds or property until certain conditions are met in a transaction.

Real Property

Land and anything permanently attached to it, such as buildings and fixtures.

Insurable Interest

A legal requirement for obtaining insurance policies, stipulating that the policyholder must stand to suffer a financial or personal loss from the insured event.

Appraisal Clause

A provision in insurance policies allowing for a neutral party to determine the value of property or the extent of damage in case of disagreement.