PFA Ltd Uses a Throughput Costing System and Reported the Following

question 55

Multiple Choice

PFA Ltd uses a throughput costing system and reported the following information for its first month of operations: Units produced…………………………………..140
Units sold………………………………………..120
Material cost per unit produced……………….$3.50
Conversion cost per unit produced……………$6.50
Fixed period costs per unit produced………….$6.00
Variable period costs per unit produced………$4.00
Selling price per unit…………………………$25.00
PFA's throughput costing operating profit will be

• A) $270
• B) $600
• C) $400
• D) None of the above

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Definitions:

Office Supplies

Consumable items that are used in the daily operations of an office like pens, paper, and staplers.

Adjusting Entry

A journal entry made in accounting to update the record of revenues earned or expenses incurred that have not been previously recorded.

Physical Count

The process of manually counting and verifying the quantities of inventory on hand at a specific point in time.

Unearned Rent

Income received for rent before the rental period has occurred, classified as a liability until the period passes.