Lakatos Corporation Manufactures One Product

question 133

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 used in production in transaction (b) above,the Raw Materials inventory account will increase (decrease) by:

• A) $1,366,439
• B) $1,267,830
• C) ($1,366,439)
• D) ($1,267,830)

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Definitions:

Somatic Complaints

Physical symptoms that an individual experiences which may or may not be attributable to a medical condition, often seen in psychological disorders.

Sleep Disturbances

Disruptions in normal sleep patterns, including difficulties in falling or staying asleep, waking up too early, or experiencing unrestful sleep.

Hyperalertness

An elevated state of constant vigilance and heightened sensitivity to one's surroundings, often seen in individuals with PTSD.

Impaired Memory

A condition characterized by the reduced ability to remember information, events, or procedures, often as a result of damage or dysfunction in the brain.