South State Company Used $71,000 of Direct Materials and Incurred

question 7

Multiple Choice

South State Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during 2015. Indirect labor amounted to $2,700 while indirect materials used totaled $1,600. Other operating costs pertaining to the factory included utilities of $3,100; maintenance of $4,500; repairs of $1,800; depreciation of $7,900; and property taxes of $2,600. There was no beginning or ending finished goods inventory, but Work-in-Process inventory began the year with a $5,500 balance and ended the year with a $7,500 balance. How much is the cost of goods manufactured?

• A)$124,700
• B)$130,200
• C)$137,700
• D)$132,200

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Definitions:

Implied Warranty

An unwritten guarantee that the goods or services being sold meet certain criteria for use as understood by the buyer and seller.

Implied Warranty

A legal assumption that a product will meet basic standards of quality and functionality, even if not expressly stated in a contract.

Ratify

To officially approve or confirm an agreement or treaty, making it formally valid.

Unauthorized Act

An action that is taken without official permission, approval, or authority.