Karim Corporation Uses a Standard Cost System in Which Inventories

question 119

Multiple Choice

Karim Corporation 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.The standard cost card for the company's only product is as follows: During the year, the company started and completed 31,500 units.Direct labor employees worked 23,650 hours at an average cost of $19.50 per hour.

Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash, Raw Materials, Work in Process, Finished Goods, and PP&E (net) .All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings.

When recording the direct labor costs, the Work in Process inventory account will increase (decrease) by:

• A)$474,075
• B)($474,075)
• C)($461,175)
• D)$461,175

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Definitions:

Serum Cholesterol

The total amount of cholesterol in the serum part of the blood, considered an important indicator of heart disease risk.

Dietary Intake

The amount of food and drink consumed by an individual or group.

Thoracic Duct

Largest lymph vessel in the body, beginning at the cisterna chyli and emptying into the left subclavian vein; drains the left side of the head and neck, the left-upper thorax, the left-upper limb, and the inferior half of the body.

Circulatory System

The body's system responsible for the transport of blood, nutrients, oxygen, carbon dioxide, and hormones throughout the body.