Altima,Inc

question 56

Multiple Choice

Altima,Inc.finished Job A40 on the last working day of the year.It utilized $300 of direct materials and $3,380 of direct labor.Altima uses a predetermined overhead allocation rate based on a percentage of direct labor costs,which has been fixed at 40%.The entry to record the completion of the job should involve a ________.

• A) debit to Finished Goods Inventory $5,032 and a credit to Materials Inventory $5,032
• B) debit to Cost of Goods Sold $5,032 and a credit to Finished Goods Inventory $5,032
• C) debit to Finished Goods Inventory $5,032 and a credit to Work-in-Process Inventory $5,032
• D) debit to Work-in-Process Inventory $5,032 and a credit to Finished Goods Inventory $5,032

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Definitions:

Lowest Price

The minimum price at which a product or service is offered in the market.

Short Run

A period in economic theory during which at least one input is fixed while others are variable.

Short Run

A period in economics during which the quantities of some inputs, typically capital, cannot be changed, affecting how firms adjust production levels.

Long Run

A period of time in economics during which all inputs, including capital and labor, can be adjusted, and all markets are in equilibrium.