The Following Costs Are Included in a Recent Summary of Data

question 122

Multiple Choice

The following costs are included in a recent summary of data for a company: advertising expense,$85,000; depreciation expense - factory building,$133,000; direct labor,$250,000; direct material used,$300,000; factory utilities,$105,000; and sales salaries expense,$150,000.Determine the dollar amount of conversion costs.

• A) $1,023,000
• B) $550,000
• C) $488,000
• D) $235,000
• E) $238,000

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Definitions:

"50 Percent" Rule

A principle in insurance, especially in regards to total loss claims, stipulating that if the cost of repairing an item exceeds 50% of its value, it is considered a total loss.

Assumption Of Risk

Voluntarily taking on a known risk. A defense against negligence that can be used when the plaintiff had knowledge of and appreciated a danger and voluntarily exposed himself or herself to the danger.

Duty Of Care

A legal obligation that requires individuals to exercise a reasonable level of caution and protection to avoid harm to others.

Reasonable Person

A hypothetical individual in law whose behavior serves as a standard to determine what a prudent person would or would not do under similar circumstances.