1) Which of the following would be included as manufacturing overhe...

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1) Which of the following would be included as manufacturing overhead for a manufacturing 1) business? A) direct labor B) advertising C) indirect materials cost D) direct materials cost 2) Period costs are the 2) A) product costs must be paid in the accounting period in which they are incurred B) costs that are incurred and expensed during the same accounting period C) same as manufacturing overhead costs D) costs related to production of products the company purchases and sells 3) The following information relates to Webster Inc.: 3) Advertising Costs $10,270 Sales Salary 4,500 Sales Revenue 450,000 President's Salary 40,300 Office Rent 61,100 Manufacturing Equipment Depreciation 2,080 Indirect Materials 9,360 Indirect Labor 11,700 Factory Repair and Maintenance 910 Direct Materials 28,080 Direct Labor 35,100 Delivery Vehicle Depreciation 1,027 Administrative Salaries 24,700 How much was Webster's manufacturing overhead? A) $21,970 B) $141,897 C) $21,060 D) $24,050 4) Which of the following would be considered a product cost for a manufacturing business? 4) A) depreciation on administrative building furniture and fixtures B) depreciation on delivery vehicles C) depreciation on the accounting department's computer equipment D) depreciation on manufacturing equipment 5) Goods that have been started in the manufacturing process but are not yet complete are included in 5) the . A) Raw Materials Inventory account B) Cost of Goods Sold account. C) Work-in-Process - Inventory account D) Finished Goods Inventory account 1 6) Jasper Corporation reports the following cost information for March: 6) $75,000 Cost of Goods Manufactured 18,250 Manufacturing Overhead 4,500 Finished Goods Inventory, March 1 Finished Goods Inventory, March 31 2,650 Work-in-Process Inventory, March 1 9,670 Work-in-Process Inventory, March 31 1,250 36,300 Direct Labor What is the amount of manufacturing overhead incurred by the company in March? A) $30,270 B) $136,570 C) $20,000 D) $13,430 7) Five Seasons is a merchandiser of packed foods. The company provides the following information 7) for the year 2015: Sales Revenue $140,000 Cost of Goods Sold $63,000 Operating Expenses $67,500 Net Income $9,500 Number of Units Sold 27,000 How much was the unit cost per unit of product sold? A) $5.18 B) $3.14 C) $2.33 D) $0.82 8) Given the following information, determine the cost of goods manufactured. 8) Direct Labor Incurred $63,000 Manufacturing Overhead Incurred 179,500 Direct Materials Used 150,000 Finished Goods Inventory, 1/1/2015 197,500 Finished Goods Inventory, 12/31/2015 221,000 Work-in-Process Inventory, 1/1/2015 96,500 Work-in-Process Inventory, 12/31/2015 109,000 A) $380,000 B) $867,000 C) $160,000 D) $243,000 9) Saturn Accounting Services expects its accountants to work a total of 30,000 direct labor hours per 9) year. The company's estimated total indirect costs are $150,000. The direct labor rate is $100 per hour. The company uses direct labor hours as the allocation base for indirect costs. If Saturn performs a job requiring 50 hours of direct labor and bills the client using a standard markup of 40%, calculate the amount of the client's bill. A) $7,700 B) $7,000 C) $4,900 D) $7,350 2 10) The December: accounts of Melissa Manufacturing showed the following balances at the beginning of 10) Account Debit Raw Materials Inventory $50,000 Work-in-Process Inventory 80,000 Finished Goods Inventory 30,000 Manufacturing Overhead 15,000 The following transactions took place during the month: December 2: Issued direct materials $25,000 and indirect materials $4,000 to production. December 15: Paid $6,000 and $3,000 toward factory's direct labor cost and indirect labor cost, respectively. What should be the balance in the Work-in-Process Inventory account at the end of December? A) $86,000 B) $105,000 C) $111,000 D) $81,000 11) The journal entry to issue indirect materials to production should include a debit to the . 11) A) Manufacturing Overhead account B) Work-in-Process Inventory account C) Raw Materials Inventory account D) Finished Goods Inventory account 12) On January 1, 2015, Frederic Manufacturing had a beginning balance in Work-in-Process Inventory 12) of $160,000 and a beginning balance in Finished Goods Inventory of $20,000. During the year, Frederic incurred manufacturing costs of $200,000. During the year, the following transactions occurred: Job C-62 was completed for a total cost of $140,000 and was sold for $155,000. Job C-63 was completed for a total cost of $180,000 and was sold for $210,000. Job C-64 was completed for a total cost $80,000 but was not sold as of year-end. The Manufacturing Overhead account had an unadjusted credit balance of $24,000, and was cleared to zero at year-end. What was the final balance in the Cost of Goods Sold account? A) $341,000 debit balance B) $341,000 credit balance C) $296,000 debit balance D) $296,000 credit balance 13) On January 1, 2014 Feldstein Manufacturing had a beginning balance in Work-in-Process 13) Inventory of $80,000 and a beginning balance in Finished Goods Inventory of $20,000. During the year, Feldstein incurred manufacturing costs of $350,000. Additionally, the following transactions occurred during the year: Job A-12 was completed for a total cost of $120,000 and was sold for $125,000 Job A-13 was completed for a total cost of $200,000 and was sold for $210,000 Job A-15 was completed for a total cost $60,000 but was not sold as of year-end The Manufacturing Overhead account had an unadjusted credit balance of $12,000, and was cleared to zero at year-end. What was the final balance in the Cost of Goods Sold account? A) $320,000 debit balance B) $12,000 credit balance C) $308,000 debit balance D) $332,000 debit balance 3 14) The journal entry for adjustment of underallocated manufacturing overhead Goods includes Sold a . 14) A) credit to Manufacturing Overhead B) credit to Cost of C) debit to Work-in-Process Inventory D) credit to Finished Goods Inventory 15) Olympia Manufacturing uses a predetermined overhead allocation rate based on a overhead percentage of 15) direct labor cost. At the beginning of 2014, Olympia estimated total manufacturing The costs at $1,050,000 and total direct labor costs at $840,000. In June, 2014, Job 511 was completed. details of Job 511 are shown below. Direct materials cost $27,500 Direct labor cost $13,000 Direct labor hours 400 hours Units of product produced 200 What is the amount of manufacturing overhead costs allocated to Job 511? A) $34,375 B) $16,250 C) $10,400 D) $5,000 16) The equivalent units of production for transferred in units are always 100% because . 16) A) they were 100% complete with respect to the previous process B) they are considered 100% complete with respect to the entire production process C) they are not utilized for production in the subsequent processes D) they are the finished goods purchased and transferred to the next process 17) Jetwell Inc. incurred $7,000 for indirect labor in Department III. The journal entry to record indirect 17) labor utilized is . A) debit Manufacturing Overhead, $7,000; credit Accounts Payable, $7,000 B) debit Manufacturing Overhead, $7,000; credit Wages Payable, $7,000 C) debit Wages Payable, $7,000; credit Manufacturing Overhead, $7,000 D) debit Accounts Payable, $7,000; credit Manufacturing Overhead, $7,000 18) Which of the following statements correctly describes the term conversion costs? 18) A) the cost incurred for direct and indirect materials during production B) the cost of direct labor combined with manufacturing overhead C) the cost to convert finished goods to sales to customers D) the cost of direct materials, direct labor, and manufacturing overhead costs incurred during production 19) Both job order costing and process costing . 19) A) follow last-in, first-out method for inventory valuation B) maintain a single Nork-in-Process Inventory account C) have the same type of product costs D) treat all period costs as product costs 4 20) Which of the following formulae is used to calculate the cost per equivalent unit of production 20) (EUP) for direct materials? A) Cost per EUP for direct materials = Total transferred in costs / Equivalent units for transferred in B) Cost per EUP for direct materials = Total conversion costs + Equivalent units of production for direct materials Cost per EUP for direct materials = Total direct materials costs + Equivalent units of production for conversion costs D) Cost per EUP for direct materials = Total direct materials costs + Equivalent units of production for direct materials 21) Under a process costing system, inventory data for the balance sheet is provided by the . 21) A) Finished Goods account B) Work-in-Process Inventory of each department C) production cost report D) Cost of Sold account 22) For a pharmaceutical company, the most suitable base for allocating research and development 22) costs to the finished products would be the A) direct labor hours B) number of new patents filed C) cost of raw materials purchased D) number of set ups 23) 23) Which of the following statements is true of the just-in-time costing system? A) It increases the risk of the inventory becoming obsolete or unsalable. B) It results in increased inventory storage costs. C) It records summary journal entries before the units are purchased. D) It increases the need for suppliers to deliver raw materials on time. 24) Which of the following statements is true of an activity-based costing system? 24) A) It is not as accurate or precise as traditional costing systems. B) It accumulates overhead costs by processing departments. C) It is not as complex or as costly as traditional systems. D) It uses separate indirect cost allocation rates for each activity. 25) 25) Which of the following statements is true of target pricing? A) It is the same as cost-based pricing. B) It starts with the price that customers are willing to pay. C) It does not consider the nonmanufacturing costs while calculating the target cost. D) It uses the full product cost that a company estimates to arrive at the sales price. 26) Pitt Jones Company, a manufacturer of small appliances, had the following activities, allocated 26) costs, and allocation bases: Activities Allocated Costs Allocation Base Account inquiry (hours) $60,000 2,000 hours Account billing (lines) $30,000 20,000 lines Account verification (accounts) $15,000 20,000 accounts Correspondence (letters) $10,000 1,000 letters The above activities are carried out at two of its regional offices. Northeast Office Midwest Office Account inquiry (hours) 100 hours 200 hours Account billing (lines) 10,000 lines 7,000 lines Account verification (accounts) 1,000 accounts 600 accounts Correspondence (letters) 50 letters 100 letters How much of the correspondence cost will be assigned to the Northeast Office? A) $500 B) $800 C) $1,200 D) $2,500 27) Maywood Company sells hand-knit scarves.. Each scarf sells for $25. The company pays $30 to 27) rent vending space for one day. The variable costs are $15 per scarf. How many scarves should the company sell each day in order to break even? A) 3 scarves B) 5 scarves C) 4 scarves D) 2 scarves 28) Identify the breakeven point in the graph given below. 28) B C E A D o A) E B) O C) B D) D 29) Colin months was a professional classical guitarist until a motorcycle accident left him disabled. After long 29) of therapy, he hired an experienced luthier and started a small shop to make and sell Spanish guitars. The guitars sell for $700 and the fixed monthly operating costs are as follows: Rent and utilities $ 800 Wages and benefits to luthier 2,500 Other expenses 480 Colin's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales, $0.60 went to cover his fixed costs, and that anything past that point was pure profit. How many guitars does Colin have to sell each month to break even? A) 7 guitars B) 9 guitars C) 14 guitars D) 6 guitars 30) The phone bill for a company consists of both fixed and variable costs. Refer to the 4-month data 30) below and apply the high-low method to answer the question. (Round your intermediate calculations to two decimal places) Minutes Total Bill January 460 $3,000 February 200 $2,675 March 160 $2,625 April 300 $2,800 What is the fixed portion of the total cost? D) $1,850 A) $2,225 B) $2,425 C) $2,625 31) Groovelex Inc. reports the following information for the year ended December 31, 2014: 31) 500 units asin? Units sold $120 Sale price per unit Direct materials $25 per unit $12 Direct labor per unit Variable manufacturing overhead $13 per unit Fixed manufacturing overhead $16.50 per unit Variable selling and administrative costs $6 per unit Fixed selling and administrative costs $12,500 per year The operating profit calculated using variable costing and absorption costing amounted to $9,270 and $11,250, respectively. There were no beginning inventories. Determine the total fixed manufacturing overhead that will be expensed under absorption costing for the year 2014. A) $20,750 B) $10,230 C) $25,000 D) $8,250 7 32) 32) Groovelex Inc. reports the following information: 550 units Units produced Units sold 500 units Sale price $120 per unit Direct materials $25 per unit Direct labor $12 per unit Variable manufacturing overhead $13 per unit Fixed manufacturing overhead $16,500 per year Variable selling and administrative costs $6 per unit Fixed selling and administrative costs $12,500 per year There are no beginning inventories. What is the ending balance in finished goods inventory using absorption costing? A) $8,000 B) $4,000 C) $6,000 D) $8,500 33) When determining the product costs for long-term planning 33) . A) variable costing is more appropriate B) the selling and distribution expenses should be ignored C) the research and development cost of the product should be ignored D) absorption costing is more appropriate 34) The method allows managers to manipulate operating profits through production. 34) A) marginal costing B) direct costing C) variable costing D) absorption costing 35) Freighters Inc. has the following budgeted figures: 35) Jan Feb Mar April Sales $50,000 $65,000 $80,000 $95,000 Cost of goods sold 60% of sales Required ending inventory $15,000 + 25% of sales of next month Inventory on hand on Jan 1st $27,500 Calculate the ending merchandise inventory for the month of March. A) $39,000 B) $52,000 C) $38,750 D) $33,750 36) When a company is preparing a budgeted statement of cash flows, the payments for selling and 36) administrative expenses can be obtained from the A) budgeted balance sheet B) sales budget C) cash budget D) budgeted payments for purchases 37) June sales were $40,000 while projected sales for July and August were $50,000 and $60,000, 37) respectively. Sales are 40% cash and 60% credit. All credit sales are collected in the month following the sale. Calculate expected collections for July. A) $50,000 B) $36,000 C) $44,000 D) $54,000 8 38) Amoeba Manufacturing Inc. provided the following information for the year 2015: 38) Purchases-Raw Materials $90,000 Plant Utilities & Insurance 67,500 Indirect Materials 11,750 Indirect Labor 4,750 Direct Materials Used in Production 96,000 Direct Labor 117,500 Depreciation on Factory Plant & Equipment 6,000 Cost of Goods Manufactured 290,850 The inventory account balances as of January 1st 2015 are given below. Raw Materials Inventory $42,000 Work-in-Process Inventory 12,000 Finished Goods Inventory 49,500 What is the ending balance in the Work-in-Process Inventory account? A) $49,500 B) $24,650 C) $65,350 D) $12,000 39) Which of the following is a product cost for a manufacturing company? 39) A) depreciation on corporate building B) commissions paid to sales staff C) salary of administrative staff D) wages paid to factory janitor 40) Crabapples Inc. purchases and sells dry fruit boxes. The following information summarizes its 40) operating activities for 2015: Selling Expenses $9,375 Inventory on December 31, 2015 32,500 Inventory on January 1, 2015 46,875 Purchases of merchandise 84,375 Rent for store 12,500 Sales commissions 7,031 Sales revenue 168,750 What is the cost per box of dry fruits if Crabapples sold 5,000 boxes of dry fruits during the year? A) $72.28 B) $10.55 C) $19.75 D) $32.75 41) Plant suffered a fire incident in August due to which most recovered: of the records for 41) the Equinox year were Fabrication destroyed. The following accounting data for the year that were Total manufacturing overhead estimated at the beginning of $105,840 the year $186,000 Total direct labor costs estimated at the beginning of the year Total direct labor hours estimated at the beginning of the year 3,600 direct labor hours $99,760 Actual manufacturing overhead costs for the year $142,000 Actual direct labor costs for the year 2,950 direct labor hours Actual direct labor hours for the year The company bases its manufacturing overhead allocation on direct labor hours. What was the predetermined overhead allocation rate for the year? A) $35.87 B) $29.40 C) $27.71 D) $33.82 42) Fogelin Promotional Services uses a job order system for costing and billing promotional services 42) for dance and ballet performances. Fogelin has four public relations specialists, and office staff. At the beginning of 2014, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. The office and administrative costs were estimated at $676,800. The allocation base for office and administrative costs is billable hours. A new client is contracting with Fogelin to promote a ballet tour in the U.S. Fogelin estimates that the job will require 40 billable hours of specialist time. If Fogelin wishes to make a 25% gross profit on the job, what price should Fogelin quote to the client? A) $2,800 B) $7,500 C) $6,000 D) $4,700 43) Which of the following is used to calculate the number of units to account for under the 43) first-in-first-out (FIFO) method of inventory valuation of process costing? A) To account for = Beginning balance + In process B) To account for = Beginning balance + Started and completed + In process C) To account for = Beginning balance + Started and completed D) To account for = Beginning balance + Amount transferred in 44) The account is credited to adjust for overallocated overhead costs. 44) A) Finished Goods Inventory B) Sales Revenue C) Cost of Goods Sold D) Manufacturing Overhead 45) are costs incurred after the company delivers poor-quality goods or services to customers 45) and then has to make things right with the customer. A) Appraisal costs B) External failure costs C) Internal failure costs D) Prevention costs 46) J-Time Inc. is planning to launch a new brand of watches for kids. Similar watches are available in 46) the market for $50. In order to penetrate the market, the company plans to use target pricing and desires a 20% net profit markup on total cost. Calculate the target cost. A) $41.67 B) $60.00 C) $30.75 D) $40.20 10 47) Colin was a professional classical guitar player until a motorcycle accident left him disabled. After 47) long months of therapy, he hired an experienced luthier and started a small shop to make and sell Spanish guitars. The guitars sell for $700 and the fixed monthly operating costs are as follows: Rent and utilities $1,210 Wages and benefits to luthier 2,500 Other expenses 481 Colin's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales, $0.75 went to cover his fixed costs, and that anything past that point was pure profit. Colin wishes to earn $5,100 of operating profit each month. Calculate the amount of sales revenue required to achieve the target profit. A) $37,164 B) $9,054 C) $10,133 D) $12,388 48) A company's proportion of fixed costs to variable costs is called its 48) A) cost structure B) target profit mixed cost D) relevant range 49) Carbon Inc. reports the following information for April: 49) Alpha Beta Unit sold 3,000 units 750 units Sale price per unit $250 $600 Variable manufacturing cost per unit 175 480 Sale commission per unit: Alpha : 8% of sales price 20 Beta: 10% of sales price 60 What is the contribution margin ratio of Beta? A) 25% B) 15% C) 20% D) 10% 50) Gamma Corp. has prepared a preliminary cash budget for the third quarter as shown below: 50) Cash Budget Jul Aug Sep Beginning cash balance $32,000 $4,400 $6,900 Plus: Cash collections 49,400 51,000 44,600 Cash available $81,400 $55,400 $51,500 Less: Cash payments: Purchases of inventory 36,000 9,000 11,000 Operating expenses 41,000 30,500 30,900 Capital expenditures 9,000 7,700 Ending cash balance $4,400 $6,900 $1,900 Subsequently, the marketing department revised its figures for cash collections. New data are as follows: $52,000 in July, $50,000 in August, and $42,000 in September. Based on the new data, calculate the new projected cash balance at the end of September. A) $900 B) $8,500 C) $7,000 D) $2,400 11 51) Which of the following will most likely be considered an indirect material cost for D) a eggs bakery? 51) A) spices B) milk C) flour 52) The journal entry to record $1,500 of direct labor and $200 of indirect labor incurred will include 52) debit(s) to the A) Work-in-Process Inventory . account for $1,500 and Manufacturing Overhead account for $200 B) Manufacturing Overhead account for $1,700 D) Work-in-Process Inventory account for $1,500 and Finished Goods Inventory account for C) Finished Goods Inventory account for $1,700 $200 53) The account is credited to adjust for underallocated overhead costs. 53) A) Finished Goods Inventory B) Manufacturing Overhead C) Cost of Goods Sold D) Sales Revenue 54) Which of the following is the correct formula to calculate the target cost? 54) A) Target Cost = Target Sales Price + Desired Profit B) Target Cost = Desired Profit + Research and Development Expenses C) Target Cost = Target Sales Price - Desired Profit D) Target Cost = Target Sales Price 55) Colin was a professional classical guitar player until a motorcycle accident left him disabled. After 55) long months of therapy, he hired an experienced luthier) and started a small shop to make and sell Spanish guitars. The guitars sell for $700 and the fixed monthly operating costs are as follows: Rent and utilities $1,210 Wages and benefits to luthier 2,500 Other expenses 480 Colin's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales, $0.65 went to cover his fixed costs, and that anything past that point was pure profit. Colin wishes to earn $4,000 of operating profit each month. Calculate the number of guitars Colin will have to sell to achieve the target profit. A) 15 guitars B) 33 guitars C) 39 guitars D) 18 guitars 56) Greenlam Inc. started the year with 200 units in the Finished Goods Inventory account. It produced 56) 600 units during the year and sold 800 units. If Greenlam uses variable costing: A) its operating profit for the period will be lower than absorption costing. B) its operating profit will be the same under absorption costing. C) its value of ending inventory reported in the balance sheet will be higher than absorption costing. D) its operating profit for the period will be higher than absorption costing. 12 57) next Uncle's budget Caps period. Inc. a merchandising company has provided the following budgeted amounts for the 57) Balance of cash at the beginning Cash collections $30,000 Payments for: 680,000 Purchase of inventory 350,000 Selling and administrative expenses 70,400 Capital expenditures 89,000 A minimum cash balance of $250,000 is required to be maintained. The company can borrow in increments of $10,000 as and when required. Assume the company can borrow the needed funds at the end of the period. Calculate the ending cash balance for the budget period. A) $250,600 B) $540,230 C) $320,300 D) $300,000 58) Which of the following will be classified as a conversion cost? 58) A) cost of raw materials B) depreciation on office furniture C) depreciation on factory equipment D) salary of sales personnel 59) Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail 59) business. Bilkins has four professionals on staff, plus an office with six clerical staff. Total compensation, including benefits, for the professional staff runs about $754,000 per year, and it normally has about 8,000 billable hours per year. Professional staff keeps detailed time sheets organized by client number. The total office and administrative costs for the year is $576,000. Bilkins allocates professional time and office and administrative costs to clients monthly, using allocation rates based on billable hours. During July, Bilkins' professionals spent 36 hours on their client, Soupy Sales. Bilkins adds a 25% markup on their costs to calculate the amount billed to the customer. How much should the company charge Soupy Sales for the month of July? (Round your intermediate calculations to two decimal places.) A) $5,985.00 B) $7,481.25 C) $6,633.00 D) $6,833.25 60) The Refining Department of Sweet Sugar Inc. had 55,000 tons of sugar to account for in December. 60) Of the 55,000 tons, 45,000 tons were completed and transferred to the Boiling Department, and the remaining 10,000 tons were 60% complete. The materials required for production are added at the beginning of the process. Conversion costs are added equally throughout the refining process. Calculate the total equivalent units of production for conversion costs. A) 51,000 units B) 55,000 units C) 45,000 units D) 6,000 units TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 61) Factory rent, taxes, and insurance are included in manufacturing overhead. 61) 62) The amount of taxes and insurance incurred and paid for the plant of a manufacturing company 62) should be debited to the Manufacturing Overhead account. 63) A textile manufacturing company is most likely to use job order costing to arrive at the cost per unit 63) of textile manufactured and sold to customers. 64) The first step in developing an activity-based costing system is to identify the activities that will be 64) used to assign the manufacturing overhead. 13 65) If fixed costs go up, and all other factors remain the same, the margin of safety will become larger. 65) 66) The contribution margin for service companies is calculated by subtracting fixed costs from service 66) revenue. 67) For a merchandising company, the budgeted sales equals the number of units budgeted for sale 67) multiplied by the budgeted selling price per unit. 68) The IMA Standards of Ethical Practice include confidentiality, competence, credibility, and 68) integrity. 69) The cost of indirect materials is transferred out of the Manufacturing Overhead account and 69) accumulated in the Raw Materials Inventory account. 70) Production cost reports prepared using first-in-first-out (FIFO) method assumes that the first units 70) started in the production process are the last units completed and sold. 14 ASSAY Write your answer in the space provided or on a separate sheet of paper. 71) Dreams Manufacturing Inc. provided the following information for the year 2015: Purchases-Raw Materials $270,000 Plant Utilities & Insurance 202,500 Indirect Materials 35,250 Indirect Labor 14,250 Ending Balance - -Work-in-Process - Inventory 42,000 Ending Balance - -Raw Materials Inventory 45,000 Direct Labor 352,500 Depreciation on Factory Plant & Equipment 18,000 Beginning Balance -Work-in-Process Inventory 18,000 Beginning Balance -Raw Materials Inventory 63,000 Required: Prepare a statement of the cost of goods manufactured using the following format: COST OF GOODS MFGD Beginning Work-in-Process Inventory Direct Materials Used: Beginning Raw Materials Inventory Purchases of Raw Materials Raw Materials Available for Use Ending Raw Materials Inventory Direct Materials Used Direct Labor Manufacturing Overhead: Indirect Materials Indirect Labor Depreciation-Plant & Equip. Plant utilities & Insurance Total Manufacturing Overhead Total Manufacturing Costs Incurred During the Year Total Manufacturing Costs to Account For Ending Work-in-Process Inventory Cost of Goods Manufactured 72) Broxsie Fabrication Inc. issued $60,000 of direct materials and $15,500 of indirect materials to production. Prepare the journal entry to record the transaction. 73) Iowa Inc. purchased raw materials for $6,000 and $25,000 for cash and on account, respectively. Provide the journal entry to record purchase of raw materials. 1) The Carolina Rubber Products Company has completed the flexible budget analysis for the second 1) quarter, which is as given below. Flexible Sales Actual Budget Flexible Volume Static Results Variance Budget Variance Budget Units/Volume 12,800 12,800 800 F 12,000 Sales Revenue $62,720 $1,280 U $64,000 $4,000 F $60,000 Variable Expenses 27,520 640 U 26,880 1,680 U 25,200 Contribution Margin $35,200 $1,920 U $37,120 $2,320 F $34,800 Fixed Expenses 34,100 100 U 34,000 34,000 Operating Income/(loss) $1,100 $2,020 U $3,120 $2,320 F $800 Which of the following statements would be a correct interpretation of the sales volume variance for operating income? A) decrease in price per unit B) increase in sales volume C) increase in variable cost per unit D) increase in fixed costs 2) Which of the following is an example of a labor efficiency standard? 2) A) 6 direct labor hours per unit B) $20 per direct labor hour C) 50 square feet per unit D) $0.95 per square foot 3) The management of Alpha Lawnmowers Company has calculated the following variances: 3) Direct materials cost variance $8,000 U Direct materials efficiency variance 35,000 F Direct labor cost variance 15,000 F Direct labor efficiency variance 12,000 U Variable overhead cost variance 2,000 F Variable overhead efficiency variance 5,000 F Fixed overhead cost variance 3,050 F When determining the total production cost flexible budget variance, what is the total manufacturing overhead variance of the company? A) $5,000 F B) $3,050 F C) $10,050 F D) $7,000 F 4) Allen Manufacturing makes staplers. The budgeted selling price is $12 per stapler, the variable 4) costs are $4 per stapler, and budgeted fixed costs are $12,000. What is the budgeted operating income for 5,000 staplers? A) $28,000 B) $60,000 C) $40,000 D) $68,000 1

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