Lakatos Corporation Manufactures One Product

question 31

Multiple Choice

Lakatos 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 contains the following information concerning direct materials:
During the year, the company completed the following transactions concerning direct materials:
a. Purchased 151,800 kilos of raw material at a price of $9.70 per kilo.
b. Used 140,870 kilos of the raw material to produce 38,100 units of work in process.
The company calculated the following direct materials variances for the year:
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 Cash account will increase (decrease) by:

• A) $1,472,460
• B) ($1,366,200)
• C) $1,366,200
• D) ($1,472,460)

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Definitions:

Parameters

In statistics, parameters are numerical characteristics of a population, such as its mean or standard deviation.

Independent

In a statistical context, refers to variables or events that are not influenced by other variables in a study; their occurrence does not depend on another.

ANOVA Table

A tabular representation used in the analysis of variance to summarize the sources of variation among group means.

F Statistic

A value calculated in ANOVA tests that compares the variability between group means over the variability within groups, used to determine statistical significance.