Reference no: EM13660084

Total 25 questions

1. During the month of September, direct labor cost totaled $13,400 and direct labor cost was 40% of prime cost. If total manufacturing costs during September were $73,000, the manufacturing overhead was:

$39,500

$33,500

$50,000

$10,500
2.
A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $4,410 and is paid at the beginning of the first year. Seventy percent of the premium applies to manufacturing operations and thirty percent applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage?


Product Period
$4,410 $0

$3,087 $1,323

$2,058 $882


$1,029 $441



3.
Carbaugh Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.

Production volume 7,000 units 8,000 units
Direct materials $82.90 per unit $82.90 per unit
Direct labor $58.20 per unit $58.20 per unit
Manufacturing overhead $74.20 per unit $69.20 per unit

The best estimate of the total cost to manufacture 7,400 units is closest to: (Do not round intermediate calculations.)

$1,545,930

$1,577,220

$1,595,100

$1,583,925


4.
A soft drink bottler incurred the following factory utility cost: $3,736 for 1,200 cases bottled and $3,812 for 1,700 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to:


$3.11

$0.15

$2.24

$2.20


5.
Supply costs at Lattea Corporation's chain of gyms are listed below:

Client-Visits Supply Cost
March 11,670 $28,584
April 11,466 $28,418
May 11,998 $28,842
June 14,300 $28,938
July 11,730 $28,645
August 11,216 $28,244
September 12,010 $28,843
October 11,701 $28,601
November 11,849 $28,726

Management believes that supply cost is a mixed cost that depends on client-visits. Use the high-low method to estimate the variable and fixed components of this cost, Compute the variable component first, rounding off to the nearest whole cent. Then compute the fixed component, rounding off to the nearest whole dollar. Those estimates would be closest to: (Round your Variable cost per unit to 2 decimal places.)

$1.92 per client-visit; $28,646 per month

$.81 per client-visit; $18,591 per month

$0.27 per client-visit; $25,144 per month

$0.23 per client-visit; $25,649 per month


6.
The following cost data pertain to the operations of Swestka Department Stores, Inc., for the month of July.

Corporate headquarters building lease $82,400
Cosmetics Department sales commissions--Northridge Store $5,860
Corporate legal office salaries $64,200
Store manager's salary-Northridge Store $19,900
Heating-Northridge Store $18,500
Cosmetics Department cost of sales--Northridge Store $34,500
Central warehouse lease cost $8,000
Store security-Northridge Store $19,700
Cosmetics Department manager's salary--Northridge Store $4,490


The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores.


What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?
$40,360
$95,540
$44,850
$34,500



7.
At a sales volume of 44,500 units, Thoma Corporation's sales commissions (a cost that is variable with respect to sales volume) total $640,800.

To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 45,500 units? (Assume that this sales volume is within the relevant range.)

$14.09

$15.09

$14.40

$13.77


8.
Erkkila Inc. reports that at an activity level of 7,000 machine-hours in a month, its total variable inspection cost is $424,580 and its total fixed inspection cost is $179,142.

What would be the average fixed inspection cost per unit at an activity level of 7,300 machine-hours in a month? Assume that this level of activity is within the relevant range.


$24.54

$86.25

$25.59

$35.06


9.
Inspection costs at one of Iuliano Corporation's factories are listed below:

Units produced Inspection cost
February 913 $ 17,012
March 965 $ 17,400
April 919 $ 17,065
May 903 $ 16,910
June 925 $ 17,094
July 910 $ 16,980
August 927 $ 17,132
September 867 $ 16,480
October 906 $ 16,938

Management believes that inspection cost is a mixed cost that depends on units produced.

Using the high-low method, the estimate of the fixed component of inspection cost per unit produced is closest to: (Round the intermediate calculations to two decimal places.)


$16,920.00
$16,481.00
$16,911.00
$8,338.65



10.
Nikkel Corporation, a merchandising company, reported the following results for July:

Sales $490,000
Cost of goods sold (all variable) $169,700
Total variable selling expense $24,200
Total fixed selling expense $21,700
Total variable administrative expense $13,200
Total fixed administrative expense $33,600

The gross margin for July is:

$227,600

$434,700

$282,900

$320,300


11.
Salvadore Inc., a local retailer, has provided the following data for the month of September:


Merchandise inventory, beginning balance $49,500
Merchandise inventory, ending balance $42,900
Sales $268,500
Purchases of merchandise inventory $138,700
Selling expense $18,800
Administrative expense $53,800

The cost of goods sold for September was:

$138,700

$145,300

$132,100

$211,300


12.
Salvadore Inc., a local retailer, has provided the following data for the month of September:

Merchandise inventory, beginning balance $ 42,700
Merchandise inventory, ending balance $ 42,100
Sales $268,300
Purchases of merchandise inventory $134,800
Selling expense $ 16,800
Administrative expense $ 57,600


The net operating income for September was:
$58,500
$134,500
$61,300
$133,500



13.
Management of Modugno Corporation is considering whether to purchase a new model 370 machine costing $525,000 or a new model 240 machine costing $423,000 to replace a machine that was purchased 8 years ago for $488,000. The old machine was used to make product M25A until it broke down last week. Unfortunately, the old machine cannot be repaired.

Management has decided to buy the new model 240 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product M25A.

Management also considered, but rejected, the alternative of simply dropping product M25A. If that were done, instead of investing $423,000 in the new machine, the money could be invested in a project that would return a total of $450,000.


In making the decision to buy the model 240 machine rather than the model 370 machine, the differential cost was:
$37,000
$65,000
$-38,000
$102,000
14.
Sawyer Manufacturing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 30,000 actual direct labor-hours and incurred $319,000 of actual manufacturing overhead cost. The Corporation had estimated that it would work 29,000 direct labor-hours during the year and incur $290,000 of manufacturing overhead cost. The Corporation's manufacturing overhead cost for the year was:


underapplied by $10,000

underapplied by $19,000

overapplied by $10,000

overapplied by $19,000



15. Cribb Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 11,400 hours and the total estimated manufacturing overhead was $255,360. At the end of the year, actual direct labor-hours for the year were 11,100 hours and the actual manufacturing overhead for the year was $244,840. Overhead at the end of the year was: (Round your intermediate calculations to 2 decimal places.)



$8,800 underapplied
$8,800 overapplied
$3,800 underapplied
$3,800 overapplied


16.
The following data have been recorded for recently completed Job 323 on its job cost sheet. Direct materials cost was $2,127. A total of 32 direct labor-hours and 256 machine-hours were worked on the job. The direct labor wage rate is $20 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $27 per machine-hour. The total cost for the job on its job cost sheet would be:

$6,635

$9,679

$7,054

$11,824


17.
During October, Dorinirl Corporation incurred $71,300 of direct labor costs and $5,900 of indirect labor costs. The journal entry to record the accrual of these wages would include a:

credit to Work in Process of $77,200

debit to Work in Process of $71,300

debit to Work in Process of $77,200

credit to Work in Process of $71,300


18.
During October, Beidleman Inc. transferred $60,900 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $65,930. The journal entries to record these transactions would include a:

credit to Cost of Goods Sold of $65,930

debit to Finished Goods of $65,930

credit to Work in Process of $60,900

credit to Finished Goods of $60,900



19.
Compute the amount of raw materials used during August if $11,000 of raw materials were purchased during the month and the inventories were as follows:

Inventories Balance August 1 Balance August 31
Raw materials $1,500 $1,300
Work in process $15,000 $16,000
Finished goods $37,000 $31,000


$16,000

$17,300

$13,800

$11,200


20.
Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $57,800 and at the end of the month was $49,400. The cost of goods manufactured for the month was $281,000. The actual manufacturing overhead cost incurred was $86,200 and the manufacturing overhead cost applied to Work in Process was $76,000. The adjusted cost of goods sold that would appear on the income statement for July is:

$272,600

$279,200

$299,600

$289,400


21.
Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $77,280 and 2,400 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $79,530 and actual direct labor-hours were 2,200.


The applied manufacturing overhead for the year was closest to: (Round your intermediate calculations to 2 decimal places.)

$75,688

$67,864

$70,840

$72,520


22.
Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $110,250 and 3,500 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $112,200 and actual direct labor-hours were 3,250.

The overhead for the year was: (Round your intermediate calculations to 2 decimal places.)

$7,875 overapplied

$9,825 underapplied

$9,825 overapplied

$7,875 underapplied

. The following information applies to the questions displayed below.]

Meyers Corporation had the following inventory balances at the beginning and end of November:
November 1 November 30
Raw Materials $ 80,000 $ 28,000
Finished Goods $ 220,000 $ 150,000
Work in Process $ 46,000 $ 50,000
________________________________________

During November, $170,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $9 per direct labor-hour, and it paid its direct labor workers $14 per hour. A total of 1,000 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $20,000 of direct materials cost. The Corporation incurred $120,000 of actual manufacturing overhead cost during the month and applied $110,000 in manufacturing overhead cost.





23.




The direct materials cost in the November 1 Work in Process inventory account totaled:

$32,000

$37,000

$23,000

$14,000


24.


The actual direct labor-hours worked during November totaled: (Round your answers to the nearest dollar.)

7,857 hours

8,571 hours

12,222 hours

13,333 hours

25.
During February, Irving Corporation incurred $77,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $75,000.

The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a:

debit to Work in Process of $75,000

credit to Work in Process of $75,000

debit to Manufacturing Overhead of $77,000

credit to Manufacturing Overhead of $77,000