The Following Is an Account for a Production Department, Showing

question 103

Multiple Choice

The following is an account for a production department, showing its costs for one month: Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the units in ending goods in process inventory cost $4,590, and the started and completed units cost $41,850, what was the cost of completing the units in the beginning goods in process inventory?

• A) $12,150.
• B) $2,160.
• C) $7,560.
• D) $54,000.
• E) $37,260.

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Definitions:

General Journal

An accounting ledger that records all types of transactions before they are transferred to specific accounts in the general ledger.

Gross Method

An accounting practice for recording purchases with a discount, where the purchase is initially recorded at gross amount with the potential discount noted separately.

Sales Discounts

A reduction in the price of goods or services offered to a customer, intended to encourage prompt payment or increase sales.

Adjusting Entry

An accounting entry made into a company's general ledger at the end of an accounting period to record any unrecognized income or expenses for the period.