Larry Corporation Has Developed Ideal Standards for Four Activities: Labor

question 99

Multiple Choice

Larry Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.Information is as follows: The actual prices paid per unit of each activity driver were equal to the standard prices.
-The non-value-added costs for inspection are

• A) $420,000.
• B) $60,000.
• C) $480,000.
• D) $40,000.

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Definitions:

General Ledger

A comprehensive record of all financial transactions, organized by account, used to compile financial statements.

Control Accounts

General ledger accounts that summarize the details of transactions recorded in subsidiary ledgers.

Cash Purchase

A transaction where goods or services are bought and paid for with physical currency at the time of purchase.

Inventory

Inventory encompasses the raw materials, work-in-progress goods, and the finished products that a company holds with the intention of selling them to earn revenue.