Selected Data Concerning the Past Year's Operations of the Beach

question 9

Multiple Choice

Selected data concerning the past year's operations of the Beach Corporation are as follows: $$\begin{array} { l r } \text { Selling and administrative expenses } & \$ 225,000 \\\text { Direct materials used } & 397,500 \\\text { Direct labour (50,000 hours) } & 450,000 \\\text { Factory overhead application rate } & 8 \text { per DLH }\end{array}$$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Inventories }$
$\begin{array}{lrr}&\text { Beginning}&\text { Ending}\\\text { Direct material } & \$ 75,000 & \$ 67,500 \\\text { Work in process } & 112,500 & 135,000 \\\text { Finished goods } & 60,000 & 37,500\end{array}$
What is the cost of direct materials purchased?

• A)$367,500
• B)$390,000
• C)$397,500
• D)$405,000

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Definitions:

Average Tax Rate

The portion of total income that is paid as taxes, calculated by dividing the total amount of taxes paid by the taxpayer's total income.

Taxable Income

The portion of an individual's or entity's income that is subject to taxation by governmental authority after deducting allowable deductions.

Lump-Sum Tax

A tax that is of a fixed amount and does not vary with the taxpayer’s income level or asset value.

Consumption Tax

A levy imposed on the acquisition of goods and services, charged at the time of purchase.