1) guasson corporation uses the weighted-average method in its process costing system.
this month, the beginning inventory in the first processing department consisted of 500
units. the costs and percentage completion of these units in beginning inventory were:
a total of 6,400 units were started and 5,800 units were transferred to the second
processing department during the month. the following costs were incurred in the first
processing department during the month:
the ending inventory was 85% complete with respect to materials and 50% complete
with respect to conversion costs.
note: your answers may differ from those offered below due to rounding error. in all
cases, select the answer that is the closest to the answer you computed. to reduce
rounding error, carry out all computations to at least three decimal places.
the cost of ending work in process inventory in the first processing department
according to the company’s cost system is closest to:
a.$36,950
b.$73,899
c.$45,553
d.$62,814
2) harist corporation sold 5,000 units in may. sales were $400,000, variable expenses
were $240,000, and fixed expenses were $120,000. if the company increases its selling
price by 10%, how many units would have to be sold in june to generate a profit of
$40,000?
a.4,200
b.4,500
c.4,000
d.5,000
3) the lfm company makes and sells a single product, product t. each unit of product t
requires 1.3 hours of direct labor at a rate of $9.10 per direct labor-hour. lfm company
needs to prepare a direct labor budget for the second quarter of next year.
the budgeted direct labor cost per unit of product t would be:
a.$9.10
b.$11.83
c.$7.00
d.$10.40
4) dodridge corporation has provided the following data for february. the beginning
balance in the raw materials inventory account was $23,000. during the month, the
company made raw materials purchases amounting to $59,000. at the end of the month,
the balance in the raw materials inventory account was $33,000. direct labor cost was
$28,000 and manufacturing overhead was $74,000. the beginning balance in the work
in process account was $12,000 and the ending balance was $17,000. the beginning
balance in the finished goods account was $48,000 and the ending balance was
$54,000.
the total manufacturing cost for february was:
a.$74,000
b.$151,000
c.$102,000
d.$161,000
5) dodge company makes two products from a common input. joint processing costs up
to the split-off point total $44,800 a year. the company allocates these costs to the joint
products on the basis of their total sales values at the split-off point. each product may
be sold at the split-off point or processed further.
what is the minimum amount the company should accept for product x if it is to be sold
at the split-off point?
a.$40,000
b.$23,500
c.$18,200
d.$45,300
6) becky works on the assembly line of a manufacturing company where she installs a
component part for one of the company’s products. she is paid $16 per hour for regular
time and time and a half for all work in excess of 40 hours per week.
becky’s employer offers fringe benefits that cost the company $3 for each hour of
employee time (both regular and overtime). during a given week, becky works 42 hours
but is idle for 3 hours due to material shortages. the company treats all fringe benefits
relating to direct labor as added direct labor cost and the remainder as part of
manufacturing overhead. the allocation of becky’s wages and fringe benefits for the
week between direct labor cost and manufacturing overhead would be:
a.choice a
b.choice b
c.choice c
d.choice d
7) at an activity level of 6,000 units the cost for maintenance is $7,200 and at 10,000
units the cost for maintenance is $11,600. using the high-low method, the cost formula
for maintenance is:
a.$1.20 per unit
b.$1.16 per unit
c.$1,200 plus $1.10 per unit
d.$600 plus $1.10 per unit
8) clubb company, which has only one product, has provided the following data
concerning its most recent month of operations:
the total gross margin for the month under the absorption costing approach is:
a.$110,000
b.$92,000
c.$119,600
d.$13,800
9) natraj corporation uses the weighted-average method in its process costing system.
operating data for the lubricating department for the month of october appear below:
what were the equivalent units for conversion costs in the lubricating department for
october?
a.41,220
b.38,400
c.37,800
d.41,520
10) rierson inc. produces and sells two products. data concerning those products for the
most recent month appear below:
the fixed expenses of the entire company were $17,730. the break-even point for the
entire company is closest to:
a.$32,250
b.$17,730
c.$31,661
d.$15,270