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Accounting:  Concepts & Applications, 11e Chapter 15  1 81.Which of the following costs would NOT be reported on a financial statement? a.Indirect costs b.Fixed costs c.Sunk costs d.Opportunity costs 82.Which of the following costs should NOT be considered when making a future decision? a.Sunk costs b.Opportunity costs c.Indirect costs d.Fixed costs 83.Costs that are specifically traceable to a unit of business.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 MULTIPLE CHOICE 1.Which of the following would NOT properly be classified as manufacturing overhead? a. Nails used to manufacture furniture b. Custodial wages for factory custodians c. Wood to manufacture cabinets d. Insurance on factory 2.Which of the following costs would NOT be classified as a product cost? a. Cost of raw materials b. Cost of labor.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 11.Which of the following is NOT a function of management? a.Planning b.Controlling c.Analyzing d.Regulating 12.The process of making decisions about future operations is called: a.Controlling b.Planning c.Evaluating performance d.Implementing 13.Which is usually conducted by executive level management? a.Evaluating b.Strategic planning c.Operational budgeting d.Controlling 14.Production prioritizing is: a.The continual evaluation of the profitability of the various product lines and divisions. b.The.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 61.The formula for total manufacturing costs is: a. Raw materials used + Direct labor costs + Applied manufacturing overhead b. Raw materials purchased + Direct labor costs + Applied manufacturing overhead c. Raw materials used + Direct labor costs + Actual manufacturing overhead d. Raw materials purchased + Direct labor costs.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 PROBLEM 1.In the spaces provided, write the letter of the definition for each of the following terms. A. Costs that change in total in direct proportion to changes in activity level. B. Costs that remain constant in total, regardless of activity level. C. Outlining the activities that need to be.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 51.Which of the following would NOT be included in manufacturing overhead? a.Indirect materials b.Factory utilities c.Factory fire insurance d.Direct labor 52.Product costs in a manufacturing firm would NOT include: a.Direct materials b.Manufacturing overhead c.Administrative costs d.Indirect labor 53.Utility expense in a merchandising company would be considered a(n): a.Product cost b.Period cost c.Manufacturing cost d.Indirect cost 54.Which of the.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 31.If direct labor time is charged to the wrong job number, that job will: a. Appear more profitable than it should b. Appear less profitable than it should c. Report the correct profitability d. None of these are correct 32.If ending Work-in-Process Inventory is understated, a. Finished Goods Inventory will be understated b. Cost of Goods.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 81.Didericksen Company's income statement for the year ended December 31, 2012, reported net income of $360,000. The financial statements also disclosed the following information: Amortization $20,000 Increase in salaries payable $  28,000 Depreciation 60,000 Dividends paid 120,000 Increase in accounts receivable 20,000 Purchase of equipment 150,000 Increase in inventory 48,000 Increase in long-term note payable 300,000 Decrease in accounts payable 76,000 Increase in.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 5.From the following data for Vargas Company, determine the net cash flow provided (used) by operating activities. Net income $50,000 Depreciation for the year 35,000 Dividends declared during the year 30,000 Beginning of Year End of Year Cash and cash equivalents $35,000 $42,000 Accounts receivable 25,000 27,000 Inventory 83,000 80,000 Prepaid expenses 7,000 8,000 Accounts payable 28,000 22,000 Accrued liabilities 2,000 7,000 Dividends payable 23,000 25,000 .
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Accounting:  Concepts & Applications, 11e Chapter 14  1 5.The income statement and balance sheet for the W. Gretsky Company for the year ended December 31, 2012 is presented below. W. Gretsky Company Income Statement For the Year Ended December 31, 2012 Sales revenue $360,000 Less: Cost of goods sold   200,000 Gross profit $160,000     Operating expenses:         Advertising $14,000         Salaries   60,000     74,000 Net income $  86,000 W. Gretsky Company Balance Sheet December 31, 2012 Assets       Current.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 4.The income statement and balance sheet for the W. Gretsky Company for the year ended December 31, 2012 is presented below: W. Gretsky Company Income Statement For the Year Ended December 31, 2012 Sales revenue $360,000 Less: Cost of goods sold   200,000 Gross profit $160,000 Less: Operating expenses          Salaries expense $60,000          Advertising expense   14,000     74,000 Net income $  86,000 W. Gretsky Company Balance.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 21.Which of the following costs is included in manufacturing overhead? a. Indirect materials b. Plant depreciation c. Rent on a manufacturing facility d. All of the these are manufacturing overhead costs 22.A debit to Work-in-Process Inventory is sometimes accompanied by a credit to: a. Accumulated Depreciation b. Indirect Wages Expense c. Manufacturing Overhead d. None of these are correct 23.Predetermined overhead.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 7.The financial statements of Girard Company reflect the following data: Sales $1,600,000 Beginning Inventory $128,000 Cost of Goods Sold 400,000 Ending Inventory 134,000 Beginning Accounts Beginning Property, Plant,    Receivable 672,000    and Equipment 310,400 Ending Accounts Ending Property, Plant,    Receivable 644,000    and Equipment 312,000 Using the above information, compute the following ratios (round to two decimal places): 1. Accounts receivable turnover 2. Average collection.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 51.If depreciation expense is $20,000 and the beginning and ending Accumulated Depreciation balances are $100,000 and $110,000, respectively, cash paid for depreciation is a. $0 b. $10,000 c. $20,000 d. $100,000 52.Sales revenue for the period is $500,000 and the beginning and ending Accounts Receivable balances are $50,000 and $37,500, respectively. How.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 61.Worthy Company's financial statements show a net income of $540,000. The following items also appear on Worthy's balance sheet: Amortization expense $144,000 Accounts receivable decrease 135,000 Inventory decrease 63,000 Interest payable increase 90,000 What is Worthy's net cash flow from operating activities? a. $276,000 b. $666,000 c. $846,000 d. $972,000 62.Booth Company's financial statements show a net income of $143,000. The.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 11.Which of the following ratios is used to measure a firm's leverage? a. Debt ratio b. Current ratio c. Asset turnover d. Return on equity 12.Which of the following ratios represents the proportion of borrowed funds used to acquire the company’s assets? a. Return on assets b. Return on sales c. Debt ratio d. Current ratio 13.Which of the following ratios.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 5.In the spaces provided, write the letter of the definition for each of the following terms. A. A future cost that can be changed by a decision made now. B. Labor that is necessary in manufacturing a product or service but is not directly related to the.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 61.In constructing a custom cabinet, an indirect material would be: a.Wood b.Screws c.Brass handles d.Hinges 62.The cost of milk for an ice cream manufacturer would be considered all of the following EXCEPT: a.Product cost b.Manufacturing cost c.Variable cost d.Indirect cost 63.Costs that are NOT classified as direct materials or direct labor but are.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 71.Given this information, cash paid for wages is a. $28,000 b. $30,000 c. $32,000 d. Not determinable from the information given 72.Given this information, cash paid for rent is a. $5,500 b. $6,000 c. $6,500 d. Not determinable from the information given 73.In 2012, Kahoka Company paid $10,000 to satisfy its 2011 tax liability, $64,000 for its 2012 tax liability, and.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 21.All of the following are involved in the management function of planning EXCEPT: a.Operational budgeting b.Capital budgeting c.Strategic planning d.Variance computation 22.Short-run planning involves which one of the following processes? a.Preparing capital budgets b.Tracking actual performance c.Preparing operational budgets d.Comparing actual results with established standards 23.Long-run planning involves which one of the following.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 4.At the end of the year, Wyatt Company had the following information related to transactions in its cash account: Payments for inventory $380,000 Collections on accounts receivables 500,000 Payments for interest 3,000 Payments for wages and salaries 174,000 Payments for purchase of land 45,000 Proceeds from sale of equipment 26,000 Payments for retirement of long-term.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 MULTIPLE CHOICE 1.Good management accounting is motivated by a.Government regulators b.Accounting rules c.Management’s desire to improve d.All of these are correct 2.Management accounting is established by: a.Individual companies b.FASB c.SEC d.GAAP 3.Which of the following principles are the LEAST uniform and are NOT mandatory? a.Financial reporting principles b.Management accounting principles c.Tax reporting principles d.All the above are equally.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 51.If manufacturing overhead is applied on the basis of machine hours and actual machine hours are more than anticipated, which of the following is true? a. Manufacturing overhead is probably overapplied b. Manufacturing overhead is probably underapplied c. Actual manufacturing overhead equals applied manufacturing overhead d. None of these are correct 52.If.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 9.The following information is available for Escalante, Inc.: Accounts payable $ 525,000 Mortgage payable 950,000 Stockholders’ equity 1,275,000 Net income 35,600 Annual interest expense 1,700                                  Annual tax expense 2,200 Using the above information, compute the following leverage ratios (round to two decimal places). 1. Debt-to-equity ratio 2. Times interest earned ratio 10.The following information is available for Lima, Inc. 2012 Cash $ 7,800 Accounts.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 41.Violet Company typically has $360,000 of fixed costs and $25 of variable costs per unit.  Violet plans to sell 8,000 units this period.  In order for Violet to break-even, what price should Violet charge per unit? a.$70 b.$25 c.$45 d.$20 42.During the quarter, Iris Company sold 100,000.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 11.When a product is sold in a job order costing system, the costs associated with that product appear: a. In finished goods inventory b. On the income statement c. On the balance sheet d. None of these are correct 12.Raw Materials Inventory is debited: a. When raw materials are purchased b. When raw materials are used.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 6.Vandalia Company reports the following selected information at year-end: Sales revenue $1,500,000 Interest revenue 12,000 Cost of goods sold 720,000 Wages expense 560,000 Depreciation expense 86,000 Other (cash) operating expenses 190,000 Proceeds from sale of equipment 74,000 Beginning of Year End of Year Accounts receivable $  110,000 $  98,000 Interest receivable 8,400 6,800 Inventory 442,000 450,000 Accounts payable 66,000 76,000 Wages payable 52,000 36,000 Using the direct method, compute the amount of net cash flow provided (used).
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Accounting:  Concepts & Applications, 11e Chapter 14  1 MULTIPLE CHOICE 1.Which of the following statements best describes financial statement analysis? a. Financial statement analysis involves relationships and trends. b. Financial statement analysis evaluates future performance. c. Measurements for a specific company should be compared only with the past. d. All of these are correct. 2.Which of the following is one of.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 12.Cheshire Company’s financial statements reflect the following information: Net income $  97,450 Cash from operations 114,900 Cash from investing 43,200 Cash from financing (5,700) Cash paid for capital expenditures 32,700 Using this information, calculate the following ratios (round to two decimal places): 1. Cash flow-to-net income 2. Cash flow adequacy 13.Write out the formula for each of the following.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 31.The transactions that are represented in Lodger’s cash account are as follows: 1. Payments for inventory 2. Collections on accounts receivables 3. Payments for wages and salaries 4. Proceeds from sale of equipment 5. Payment of dividends to stockholders 6. Payments for taxes Using the above information, compute the amount of cash provided by (used in).
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Accounting:  Concepts & Applications, 11e Chapter 14  1 51.Which ratio represents how many times during the year a company is collecting its receivables? a. Average collection period for accounts receivable b. Accounts receivable turnover c. Inventory turnover d. Fixed asset turnover 52.Which ratio represents how many times a company replenishes its inventory during the year? a. Average collection period for accounts receivable b. Accounts.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 71.Costs that are directly traceable to a unit of business or segment being analyzed are called: a.Direct costs b.Sunk costs c.Variable costs d.Overhead costs 72.Another name for joint costs is: a.Direct costs b.Indirect costs c.Variable costs d.Fixed costs 73.Costs incurred for the benefit of more than one segment of the business are called: a.Direct.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 7.From the following information for Epperson Company, prepare a statement of cash flows for the year ended December 31, 2012, using the indirect method. Amortization of patent $  8,000 Depreciation expense 14,000 Net income 50,000 Payment of dividends 58,000 Purchase of equipment 33,500 Retirement of long-term debt 20,000 Issuance of common stock 30,000 Cash received in the sale of.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 31.In a common-size income statement, each item on the statement is expressed as a percentage of a. Revenue b. Expenses c. Net income d. Gross profit 32.In a common-size balance sheet, each item on the balance sheet is typically expressed as a percentage of a. Assets b. Net income c. Equity d. Sales revenue 33.A useful tool in financial statement analysis.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 61.When analyzing a company’s debt-to-equity ratio, if the ratio has a value that is greater then one, then the company has a. Less debt than equity b. More debt than equity c. Equal amounts of debt and equity d. None of these are correct 62.When analyzing a company’s debt-to-equity ratio, if the.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 41.The direct and indirect methods will usually show different amounts of cash flows from a. Operating activities b. Financing activities c. Investing activities d. None of these are correct 42.Which of the following would be subtracted from net income on a statement of cash flows prepared by the indirect method? a. An increase in.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 7.Tulip Company is a tulip bulb distributor.  Every year, Tulip Company plants an outdoor show garden where visitors can see all the varieties of tulips.  The garden is open only during the month of April.  The original cost to design and landscape the.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 21.Which of the following ratios is calculated using only income statement numbers? a. Debt ratio b. Return on sales c. Return on equity d. Current ratio 22.Which of the following ratios is calculated using numbers from both the income statement and the balance sheet? a. Current ratio b. Price-earnings ratio c. Return on equity d. Return on sales 23.Which of the.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 3.On December 31, 2012, Catron Company’s ledger had the following information in its cash account: Cash Beg. Bal. 35,000 (1) 140,000 (2) 270,000 (3) 106,000 (4) 14,500 (5) 6,000 (6) 20,000 End. Bal. 47,500 The transactions that are represented in Catron’s cash account are as follows: 1. Payments for inventory 2. Collections on accounts.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 PROBLEM 1.Tabiona Company had the following transactions during the year. a. Received $15,000 cash payment on accounts receivable. b. Sold land for $60,000. c. Paid $25,000 of its accounts payable d. Sold (issued) 1,000 shares of common stock, $10 par, for $40 per share. e. Recorded depreciation expense of $25,000. f. Borrowed $85,000 from Green.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 71.Which cash flow ratio reflects the extent to which accrual accounting adjustments and assumptions have been included in net income? a. Cash flow-to-operating profit b. Cash flow-to-net income c. Cash flow frequency d. Cash flow adequacy 72.Which cash flow ratio reflects a company’s ability to finance its capital expansion through cash.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 2.In the chart below, list the three main differences between managerial accounting and financial accounting.  Managerial Accounting Financial Accounting Source: Purpose: Outcome: 3.List and describe the three management functions. 4.List and describe the two types of long-run planning and the two types of short-run planning.  .
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Accounting:  Concepts & Applications, 11e Chapter 15  1 6.Complete the following phrases by inserting the appropriate cost term. 1. _____ is a management technique developed by DuPont to measure operating performance and efficiency in using assets. 2. _____ costs often involve the outlay of cash. 3. _____ costs never involve an outlay of cash. 4. _____ costs, often referred to as manufacturing costs,.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 2.The Santini Company had the following selected transactions during the past year: a. Sold (issued) 5,000 shares of common stock, $1 par, for $10 per share. b. Sold equipment for $5,000. The original cost was $20,000; the book value was $5,500. c. Paid $30,000 of its accounts payable. d. Borrowed $60,000.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 PROBLEM 1.The financial statements for Kobe Corporation revealed that sales revenue was $1,581,000 and that the following were the ending account balances: Cash $100,000 Accounts payable $  80,000 Accounts receivable 130,000 Mortgage payable 500,000 Land 200,000 Capital stock 300,000 Buildings 500,000 Retained earnings 50,000 Compute the following (round all numbers to one decimal place): a. Debt ratio b. Current ratio c. Asset turnover ratio 2.Amherst, Inc.'s financial statements.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 31.If a cost increases as the sales volume increases, the cost is a(n): a.Direct cost b.Sunk cost c.Variable cost d.Fixed cost 32.If total cost stays the same, even though the production level has risen, the cost is a(n): a.Indirect cost b.Fixed cost c.Variable cost d.Out-of-pocket cost 33.Zodiac Company's total costs are the same.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 41.Which of the following statements is true? a. Actual overhead costs are entered as credits to Manufacturing Overhead b. Manufacturing Overhead is debited when overhead is applied c. When the credit balance in Manufacturing Overhead exceeds the debit balance in Manufacturing Overhead, manufacturing overhead has been underapplied d. When the debit.
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Accounting:  Concepts & Applications, 11e Chapter 14  1 41.Borrowing that allows a company to purchase more assets than its stockholders are able to pay for is a. Leverage b. Profitability c. Efficiency d. Liquidity 42.Which of the following ratios is used to measure a firm’s profitability? a. Liabilities ÷ Equity b. Sales ÷ Assets c. Assets ÷ Equity d. Net income ÷ Sales 43.Which of the following ratios is.
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Accounting:  Concepts & Applications, 11e Chapter 13  1 8. Ciomara Corporation Balance Sheet December 31, 2012 Assets 2012 2011 Cash $  11,000 $  46,500 Accounts receivable 120,000 115,500 Land 75,000 60,000 Equipment 70,000 90,000 Accumulated depreciation     (13,500)     (19,500) Total assets $262,500 $292,500 Liabilities and Stockholders' Equity Accounts payable $    6,000 $    9,000 Long-term debt 20,000 28,500 Common stock 197,000 174,500 Treasury Stock (7,000) (2,000) Retained earnings       46,500      82,500 Total liabilities & stockholders' equity $262,500 $292,500 Ciomara Corporation Income Statement For the year ended December 31, 2012 Sales $ 320,000 Cost of goods sold    (279,000) Gross margin $   41,000 Depreciation expense       (9,000) Selling and administration.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 71.Delaware Manufacturing had the following information for March 2012: Beginning raw materials inventory $34,560 Beginning work-in-process inventory 23,040 Beginning finished goods inventory 31,240 General administrative expenses 43,200 Raw materials used 129,600 Indirect labor 24,000 Indirect materials 42,000 Depreciation-factory equipment 22,000 Direct labor 97,920 Applied manufacturing overhead 87,360 Ending work-in-process inventory 28,800 Ending finished goods inventory 66,240 Based on this information, the cost of goods manufactured is: a. $309,120 b. $320,640 c. $326,400 d. $352,320 72.Nester Company recorded.
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