Answer the Following Questions Using the Information Below:
Elton, Inc

question 36

Multiple Choice

Answer the following questions using the information below:
Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016:
$$\begin{array} { l r r } & \text { Beginning inventory } & \text { Ending inventory } \\\text { Direct materials } & 1,000 \text { units } & 1,000 \text { units } \\\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \\\text { Finished goods inventory } & 400 \text { units } & 500 \text { units }\end{array}$$
-On the 2016 budgeted income statement,what amount will be reported for cost of goods sold?

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

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Definitions:

Price Level

Price Level is a measure of the average prices of goods and services in an economy at a given time, often used to assess inflation or deflation.

Inflation Rate

The percentage increase in the general price level of goods and services in an economy over a period of time.

A.W. Phillips

An economist known for describing the inverse relationship between rates of unemployment and corresponding rates of inflation, which is now known as the Phillips Curve.

United Kingdom

A sovereign country located off the northwestern coast of mainland Europe, comprising England, Scotland, Wales, and Northern Ireland.