Given the Following Account Balances at the End of the First

question 79

Multiple Choice

Given the following account balances at the end of the first year of operations: Direct materials inventory $ 60,000
Work in process inventory 120,000
Finished goods inventory 180,000
Cost of goods sold 600,000
Direct material price variance 65,000 U
Direct material efficiency 195,000 F
Assuming that variances are considered material, the entry and amount of the direct material efficiency variance allocated to work in process inventory is:

• A)Credit $26,000
• B)Credit $24,375
• C)Debit $17,333
• D)Debit $8,125

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Definitions:

Return On Assets

A profitability ratio that measures how effectively a company uses its assets to generate profit, calculated as net income divided by total assets.

Profit Margin

a financial metric that shows the percentage of revenue remaining after all costs, expenses, and taxes have been deducted, indicating the efficiency and profitability of a company.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue, indicating how well assets are being utilized.

Common Size Balance Sheet

A financial statement that displays all items as percentages of a common base figure, allowing for easy comparison across time periods or companies by standardizing the data.