Use the Following Information to Compute the Cost of Goods

question 102

Multiple Choice

Use the following information to compute the cost of goods manufactured. Assume that all raw materials used were traceable to specific units of product: $\begin{array} { l r } \text { Beginning raw materials } & 5,500 \\\text { Ending raw materials } & 4,000 \\\text { Direct labor } & 12,250 \\\text { Raw material purchases } & 7,400 \\\text { Depreciation on factory equipment } & 6,500 \\\text { Factory repairs and maintenance } & 3,300 \\\text { Beginning finished goods inventory } & 10,200 \\\text { Ending finished goods inventory } & 8,900 \\\text { Beginning work in process inventory } & 5,700 \\\text { Ending work in process inventory } & 6,300\end{array}$

• A) $36,650.
• B) $30,950.
• C) $30,650.
• D) $30,350.
• E) $31,650.

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Definitions:

Principal-Agent Problem

(1) At a firm, a conflict of interest that occurs when agents (workers or managers) pursue their own objectives to the detriment of the principals’ (stockholders’) goals. (2) In public choice theory, a conflict of interest that arises when elected officials (who are the agents of the people) pursue policies that are in their own interests rather than policies that would be in the better interests of the public (the principals).

Profit Sharing Plans

A company program that gives employees a share in the profits of the company.

Principal-Agent Problem

A dilemma in which one party (the agent) is supposed to act in the best interest of another party (the principal) but may act in their own interest instead, leading to inefficiencies.

Pablo Picasso

A Spanish painter, sculptor, printmaker, ceramicist, and stage designer considered one of the greatest and most influential artists of the 20th century.