Answer the Following Questions Using the Information Below:
the Rest-A-Lot $\begin{array}{ll}\text { Direct materials } & \$ 24000 \\\text { Conversion costs } & \$ 35000\end{array}$

question 295

Multiple Choice

Answer the following questions using the information below:
The Rest-a-Lot chair company manufactures a standard recliner.During February,the firm's Assembly Department started production of 75 000 chairs.During the month,the firm completed 80 000 chairs,and transferred them to the Finishing Department.The firm ended the month with 10 000 chairs in ending inventory.There were 15 000 chairs in beginning inventory.All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process.The FIFO method of process costing is used by Rest-a-Lot.Beginning work in process was 30% complete as to conversion costs,while ending work in process was 80% complete as to conversion costs.
Beginning inventory:

$\begin{array}{ll}\text { Direct materials } & \$ 24000 \\\text { Conversion costs } & \$ 35000\end{array}$

Manufacturing costs added during the ocounting period:

$\begin{array} { l l } \text { Direct materials } & \$ 168000 \\ \text { Conversion costs } & \$ 278000 \end{array}$
-How many of the units that were started during February were completed during February?

• A)75 000
• B)80 000
• C)85 000
• D)65 000

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Definitions:

Production Orders

Instructions or commands produced to initiate the manufacture of a specific quantity of goods at a specified time.

Activity-Based Costing

A costing method that allocates overhead and indirect costs to specific activities, providing more accurate product costing.

Direct Labor Rate

The cost of the work done by those employees who directly manufacture the products, usually measured per hour.

Direct Materials Cost

The expense associated with acquiring raw materials that are directly utilized in the manufacture of goods.