Answer the Following Questions Using the Information Below:
Estate Corp

question 193

Multiple Choice

Answer the following questions using the information below:
Estate Corp., has the following information:
$$\begin{array} { l c } \text { Month } & \text { Budgeted Purchases } \\\text { January } & \$ 26,800 \\\text { February } & 29,000 \\\text { March } & 28,500 \\\text { April } & 29,480 \\\text { May } & 26,680\end{array}$$ Purchases are paid for in the following manner:
10% of the purchase amount in the month of purchase
50% of the purchase amount in the month after purchase
40% of the purchase amount in the second month after purchase
-What is the expected balance in Accounts Payable as of March 31?

• A) $37,250
• B) $18,312
• C) $2,900
• D) $30,520

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Definitions:

Process Costing System

An accounting method used to allocate costs to units of production in continuous processes, suitable for homogenous products.

Work In Process Inventory

The direct materials costs, the direct labor costs, and the applied factory overhead costs that have entered into the manufacturing process but are associated with products that have not been finished.

Work In Process Inventory

The value of unfinished goods in the production process at a given point in time.

Conversion Costs

The combination of labor costs and overhead expenses involved in transforming materials into finished goods.