Vignana Corporation Manufactures and Sells Hand-Painted Clay Figurines of Popular

question 11

Multiple Choice

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year:

-What is the total of the direct costs above?

• A) $65,000
• B) $112,000
• C) $155,000
• D) $202,000

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Definitions:

Accruals

Accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash transactions occur, reflecting the economic activity more accurately.

Employee Benefits

All forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment.

Insurance Contracts

Contracts under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specific uncertain future event adversely affects the policyholder.

Warranty Obligations

Liabilities recognized by a company to cover the costs of repairs or replacements for products sold within a specified warranty period.