During Its First Year of Operations, Carlos Manufacturing Corporation Incurred

question 47

Multiple Choice

During its first year of operations, Carlos Manufacturing Corporation incurred the following costs to produce 8, 000 units of its only product: The company also incurred the following costs in selling 7, 500 units of product during its first year: Assume that direct labor is a variable cost. Under variable costing, what is the total cost that would be assigned to Carlos' finished goods inventory at the end of the first year of operations?

• A)$15, 000
• B)$42, 125
• C)$44, 000
• D)$14, 000

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Definitions:

Direct Materials Cost

The cost of raw materials that can be directly attributed to the production of goods.

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to specific products or projects based on their consumption of resources.

Direct Labor-Hours

The total hours worked directly on manufacturing a product or providing a service.

Direct Materials Cost

The cost of raw materials that can be directly attributed to the production of specific goods or services.