The Work-In-Process Inventory of the Rapid Fabricating Corp

question 15

Multiple Choice

The Work-in-Process Inventory of the Rapid Fabricating Corp.was $3,000 higher on December 31,2012 than it was on January 1,2012.This implies that in 2012

• A)cost of goods manufactured was higher than cost of goods sold.
• B)cost of goods manufactured was less than total manufacturing costs.
• C)manufacturing costs were higher than cost of goods sold.
• D)manufacturing costs were less than cost of goods manufactureD.

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Definitions:

Total Variable Costs

The sum of expenses that vary directly with the level of output production.

Average Total Cost

The per unit cost of production, calculated by dividing total cost by the total quantity of output produced.

Average Variable Cost

The total variable costs divided by the quantity of output produced, reflecting the per unit cost of variable inputs.

Average Fixed Costs

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced, a measure that decreases as production increases.