Iagan,IncHas Collected the Following Data What Is the Ending Balance in Finished Goods Inventory Using

question 174

Multiple Choice

Iagan,Inc.has collected the following data.(There are no beginning inventories.) $$\begin{array} { | l | r | c | } \hline \text { Units produced } & 700 & \text { units } \\\hline \text { Sales price } & \$ 150 & \text { per unit } \\\hline \text { Direct materials } & \$ 30 & \text { per unit } \\\hline \text { Direct labor } & \$ 10 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 10 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 17,300 & \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 6 & \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 17,200 & \text { per year } \\\hline\end{array}$$ What is the ending balance in Finished Goods Inventory using variable costing if 600 units are sold?

• A) $4000
• B) $5000
• C) $2000
• D) $3000

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Definitions:

Promissory Note

A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

Accounts Receivable

Amounts owed to a business by its customers from sales or services rendered on credit that are expected to be collected in cash.

Notes Receivable

Financial assets representing amounts owed to the holder by individuals or entities, usually evidenced by formal instruments of credit.

Accounting Issues

Challenges or problems encountered in the preparation, auditing, or analysis of financial statements.