Given the Following Account Balances at the End of the First

question 117

Multiple Choice

Given the following account balances at the end of the first year of operations: Work in process inventory $ 90,000
Finished goods inventory 165,000
Cost of goods sold 495,000
Direct labour price variance 35,000 U
Direct labour efficiency variance 17,000 F
Assuming that variances are considered material, the entry and amount of direct labour variances allocated to the Finished Goods Inventory is:

• A)Credit $3,740
• B)Debit $2,160
• C)Credit $770
• D)Debit $3,960

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Definitions:

Valued

Considered to hold importance, worth, or usefulness in a particular context.

Discount Rate

The rate applied in discounted cash flow analysis for the assessment of the current value of future expected cash flows.

Present Value

Today's valuation of a future money sum or sequence of cash payments, given a specific rate of return.

Received

Refers to the act of obtaining or taking possession of something, often used in financial transactions.