Max Company's Accounting Records Provide the Following Information A) $35 300
B) $37 000
C) $42 300
D)

question 54

Multiple Choice

Max Company's accounting records provide the following information. What is the business' direct material cost for the period?
$$\begin{array} { l r } \text { Cost of goods manufactured } & \$ 65000 \\\text { Ending work in process } & \$ 31500 \\\text { Manufacturing overhead } & \$ 16400 \\\text { Direct labour } & \$ 9800 \\\text { Beginning work in process } & \$ 28000\end{array}$$

• A) $35 300
• B) $37 000
• C) $42 300
• D) $96 500

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Definitions:

Absorption Costing

A method of cost accounting that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Variable Costing

A costing method where only variable manufacturing costs are included in the cost of goods sold, with fixed manufacturing overhead treated as a period expense.

Absorption Costing

An accounting method that includes all manufacturing costs (both fixed and variable) in the cost of a product.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs, reflecting the actual profitability.