Answer the Following Questions Using the Information Below:
Comfort Chair $\begin{array} { l l } \text { Direct materials } & \$ 24,000 \\ \text { Conversion costs } & \$ 35,000 \end{array}$

question 33

Multiple Choice

Answer the following questions using the information below:
Comfort chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 73,000 chairs. During the month, the firm completed 78,000 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 Comfort. 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:
$\begin{array} { l l } \text { Direct materials } & \$ 24,000 \\ \text { Conversion costs } & \$ 35,000 \end{array}$
Manufacturing costs added auring the œcounting period:
Direct materials $\quad \$ 168,000$
Conversion costs $\quad \$ 278,000$
-What is the amount of direct materials cost assigned to ending work-in-process inventory at the end of February?

• A) $19,000
• B) $23,000
• C) $25,000
• D) $27,000

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Definitions:

Accounts Receivable

Amounts due from customers to a business for goods delivered or services completed but not yet compensated.

Allowance Account

A contra-asset account used to estimate and offset the value of accounts receivable that may not be collectible.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that may not be collected.

Percentage of Receivables

A method for estimating the allowance for doubtful accounts based on the expected percentage of accounts receivable that may not be collectible.