Houston Corporation Reports the Following Cost Information for March What Is the Amount of Direct Materials Used by the

question 25

Multiple Choice

Houston Corporation reports the following cost information for March: $$\begin{array} { | l | r | } \hline \text { Cost of Goods Manufactured } & \$ 75,000 \\\hline \text { Manufacturing Overhead } & 18,700 \\\hline \text { Finished Goods Inventory, March 1 } & 4,000 \\\hline \text { Finished Goods Inventory, March 31 } & 4,000 \\\hline \text { Work-in-Process Inventory, March 1 } & 9,790 \\\hline \text { Work-in-Process Inventory, March 31 } & 1,280 \\\hline \text { Direct Labor } & 36,800 \\\hline\end{array}$$ What is the amount of direct materials used by the company in March?

• A)$10,990
• B)$8,510
• C)$18,100
• D)$19,500

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Definitions:

Financial Statements

Are formal records of the financial activities and position of a business, person, or other entity, providing an overview of a company's financial condition in both short and long term.

Average Collection Period

The ratio of accounts receivable to daily sales. Also called days’ receivables.

Financial Statements

Documents that report the financial activities and condition of a business or entity, including the balance sheet, income statement, and cash flow statement.

After-Tax Profit Margin

A profitability ratio calculated by dividing net income after taxes by net sales, showing what percentage of sales translates into profits after all expenses.