Use the Information Below to Answer the Following Question(s)

question 22

Multiple Choice

Use the information below to answer the following question(s) .
Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2012. Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase. Each vase requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started. Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

-On the 2012 budgeted income statement, what amount will be reported for cost of goods sold?

• A) $91,500
• B) $105,000
• C) $90,000
• D) $88,500
• E) $72,000

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Definitions:

Scrap Value

The estimated resale value of an asset after its useful life is over.

Transmitter

A device or system that sends out signals, messages, or other forms of communication.

Sum-Of-The-Years-Digits

A depreciation method that accelerates the rate of depreciation, basing it on a fraction that decreases annually.

Scrap Value

The estimated resale value of an asset at the end of its useful life.