Question

1. A company had beginning inventories as follows: Direct Materials, $300; Work-in-Process, $500; Finished Goods, $700....

1.

A company had beginning inventories as follows: Direct Materials, $300; Work-in-Process, $500; Finished Goods, $700. It had ending inventories as follows: Direct Materials, $400; Work-in-Process, $600; Finished Goods, $800. Material Purchases (net including freight) were $1,400, Direct Labor $1,500, and Manufacturing Overhead $1,600. What is the Cost of Goods Sold for the period?

$4,100.

$4,200.

$4,300.

$4,400.

2.

The journal entry to record the completion of a job in a job costing system is:

A. Finished Goods Inventory xxx
Materials Inventory xxx


B. Work-In-Process Inventory xxx
Applied Manufacturing Overhead xxx


C. Manufacturing Overhead Control xxx
Finished Goods Inventory xxx


D. Finished Goods Inventory xxx
Work-In-Process Inventory xxx

Option A

Option B

Option C

Option D

3.

The following information pertains to Oklahoma Co.'s Tulsa Division for the month of April:

Units Materials
Beginning Work-in-Process 15,000 $ 5,500
Started in April 40,000 $ 18,000
Units completed 42,500
Ending Work-in-Process 12,500

All materials are added at the beginning of the process. Using the weighted-average method, the cost per equivalent unit of materials is: (CPA adapted)

$0.59.

$0.55.

$0.45.

$0.43.

4.

The Finishing Department had 5,000 incomplete units in its beginning Work-in-Process Inventory which were 100% complete as to materials and 30% complete as to conversion costs. 15,000 units were received from the previous department. The ending Work-in-Process Inventory consisted of 2,000 units which were 50% complete as to materials and 30% complete as to conversion costs. The Finishing Department uses first-in, first-out (FIFO) process costing.

What are the equivalent units of production for the conversion costs during the period?

14,500.

15,100.

16,500.

17,100.

5.

Banc Corp. Trust is considering either a bankwide overhead rate or department overhead rates to allocate $396,000 of indirect costs. The bankwide rate could be based on either direct labor hours (DLH) or the number of loans processed. The departmental rates would be based on direct labor hours for Consumer Loans and a dual rate based on direct labor hours and the number of loans processed for Commercial Loans. The following information was gathered for the upcoming period:

Department DLH Loans Processed Direct Costs
Consumer 14,000 700 $ 280,000
Commercial 8,000 300 $ 180,000

Banc Corp. Trust estimates that it costs $500 to analyze and close a commercial loan. This amount has been included in the $396,000 of indirect costs. How much of the $396,000 indirect costs should be allocated to the Consumer Department?

$246,000.
$280,000.
$172,200.
$116,000.
6.

Allure Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information:

Activity Cost Driver Amount M XY
Production setups Number of setups $ 82,000 8 12
Material handling Number of parts 48,000 56 24
Packaging costs Number of units 130,000 80,000 50,000
$ 260,000

What is the total overhead allocated to Product XY using the current system?

$113,600.
$100,000.
$146,400.
$160,000.

Homework Answers

Answer #1

1) $4,200
Calculation : $300 + 1,400 - 400 = $1,300 (Direct materials used in production)
$500 + 1,300 + 1,500 + 1,600 - 600 = $4,300 (Cost ofGood Manufactured)
$700 + 4,300 - 800 = $4,200

2) D. Finsished good inventory
         Work - in-process inventory

3) $0.43
Calculation : ($5500 + 18000) / (42,500 +12500) = $0.43

4) 17,100
Calculation : 5,000(.70) + 13,000 + 2,000(.30) = 17,100

5) $172,200
Calculation : 396,000 – $500(300) = $246,000; $246,000 / (300+ 700) = $246 per loan ; $246(700) + $500 (0) = $172,200

6) $1,00,000
Calculation: 260,000/130,000 = 2 per unit , $2 × 50,000 = 1,00,000

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