Reedy Company Reports the Following Information for 2012: Factory

question 162

Multiple Choice

Reedy Company reports the following information for 2012: Factory overhead is 75% of the cost of direct labor. Work in process inventory on December 31, 2012, is:

• A) $16,250
• B) $8,500
• C) $18,750
• D) $13,500

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock and often pays dividends.

Cumulative

Refers to the total amount accumulated over a period of time, often used to describe amounts of money or measurements that build up until a specific point is reached.

Par Value

The nominal or face value of a bond, stock, or coupon as stated by the issuer, which may differ from its market value.

Corporate Creditors

Entities or individuals that a company owes money to because of previous transactions or agreements involving goods, services, or loans.