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Question
Value Company
Value Company's beginning and ending inventories for the fiscal year ended September 30, Year 5, are
| October 1, Year 4 | September 30, Year 5 | |
| Raw materials | $15,000 | $22,000 |
| Work-in-process | 40,000 | 35,000 |
| Finished goods | 8,000 | 12,000 |
Production data for the fiscal year ended September 30, Year 5, are
| Raw materials purchased | $ 80,000 | |
| Purchase discounts | 1,000 | |
| Direct labor | 100,000 | |
| Manufacturing overhead | 75,000 | |
Assume Value Company treats all raw materials as direct materials once they enter the production process. Thus, no raw materials are treated as manufacturing overhead.
(CMA adapted, Dec 95 #29) Refer to the Value Company example. The total value of inventory to be reported on the balance sheet as of September 30, Year 5, for Value Company is
A. $22,000
B. $35,000
C. $12,000
D. $69,000
E. $96,000
Answer
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