A Sales Invoice Included the Following Information: Merchandise Price, $4,500;

question 66

Multiple Choice

A sales invoice included the following information: merchandise price, $4,500; transportation, $300; terms 1/10, n/eom, FOB shipping point.Assuming that a credit for merchandise returned of $600 is granted prior to payment, that the transportation is prepaid by the seller, and that the invoice is paid within the discount period, what is the amount of cash received by the seller?

• A) $3,861
• B) $4,158
• C) $4,161
• D) $4,200

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Definitions:

Work in Process

Inventory that includes materials that have been partially completed, but not yet ready for sale.

Indirect Materials

These are materials used in the production process that cannot be directly linked to a specific product, such as lubricants for machines.

Overapplied

Refers to the condition where the allocated manufacturing overhead cost exceeds the actual manufacturing overhead cost.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including utilities, maintenance, and factory equipment depreciation.