Uniq Works Purchased Raw Materials Amounting to $126,000 on Account

question 163

Multiple Choice

Uniq Works purchased raw materials amounting to $126,000 on account and $16,000 for cash.The materials will be used to manufacture upholstery for furniture manufacturers on a contract basis.Which of the following journal entries correctly records this transaction?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts Payable } & 126,000 & \\
• \hline \text { Cash } & 16,000 & \\
• \hline \text { Raw Materials Inventory } & & 142,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { |l| r | r | }
• \hline \text { Finished Goods Inventory } & 142,000 & \\
• \hline \text { Accounts Payable } & & 142,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { |l | r | r | }
• \hline \text { Work-in-Process Inventory } & 142,000 & \\
• \hline \text { Accounts Payable } & & 142,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Raw Materials Inventory } & 142,000 & \\
• \hline \text { Cash } & & 16,000 \\
• \hline \text { Accounts Payable } & & 126,000 \\
• \hline
• \end{array}\]

Identify the circumstances under which product costs are expensed on the income statement.

Differentiate between fixed, variable, and mixed costs based on their behavior and relevance to decision-making.

Comprehend the significance of opportunity costs in managerial decision-making.

Understand classification of costs for managerial control, including direct and indirect costs, and the relevance of such classifications.

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