Caltran,Inc B) C) D)

question 124

Multiple Choice

Caltran,Inc.completed manufacturing Job 445.It included $350 of direct materials cost,$1240 of direct labor cost,and $500 of allocated manufacturing overhead.Which of the following is the correct journal entry needed to record the completed job?

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Work-in-Process Inventory } & 2090 & \\
• \hline \text { Finished Goods Inventory } & & 2090 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Finished Goods Inventory } & 2090 & \\
• \hline \text { Materials Inventory } & & 2090 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Work-in-Process Inventory } & 1590 & \\
• \hline \text { Cost of Goods Sold } & & 1590 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Finished Goods Inventory } & 2090 & \\
• \hline \text { Work-in-Process Inventory } & & 2090 \\
• \hline
• \end{array}\]

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Definitions:

Fixed Costs

Costs that do not fluctuate with changes in production level or sales volume, such as rent and salaries.

Operating Income

Income generated from regular business operations, excluding expenses like interest and taxes.

Margin of Safety

The difference between actual sales and the break-even point, used to assess the risk of loss from declining sales.

Fixed Costs

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.