1) Yoder Corporation uses the weighted-average method in its process costing system.
The following data pertain to operations in the first processing department for a recent
month:
How much cost, in total, was assigned to the ending work in process inventory?
A.$2,600
B.$4,300
C.$15,000
D.$5,400
2) Costs in an operation costing system are accumulated by:
A.department.
B.by individual job.
C.by both job and departments.
D.by neither job nor department.
3) A quantity of a particular raw material was purchased for $43,250. The standard cost
of the material was $2.00 per kilogram and there was an unfavorable materials price
variance of $3,250. How many kilograms were purchased?
A.20,000
B.21,625
C.23,250
D.24,875
4) If a cost object such as a product or customer has a negative red margin, then:
A.its green margin will be positive.
B.its green margin may be positive, negative, or zero.
C.its green margin will be negative.
D.its green margin will be zero.
5) Which of the following costs, if expressed on a per unit basis, would be expected to
decrease as the level of production and sales increases?
A) Sales commissions.
B) Fixed manufacturing overhead.
C) Variable manufacturing overhead.
D) Direct materials.
6) Zumbrunnen Corporation uses activity-based costing to compute product margins.
Overhead costs have already been allocated to the company’s three activity cost
pools-Processing, Supervising, and Other. The costs in those activity cost pools appear
below:
Processing costs are assigned to products using machine-hours (MHs) and Supervising
costs are assigned to products using the number of batches. The costs in the Other
activity cost pool are not assigned to products. Activity data appear below:
Finally, sales and direct cost data are combined with Processing and Supervising costs
to determine product margins.
What is the product margin for Product H2 under activity-based costing?
A.$28,000
B.-$10,840
C.$6,820
D.$27,700
7) Kudej Printing uses two measures of activity, press runs and book set-ups, in the cost
formulas in its budgets and performance reports. The cost formula for wages and
salaries is $8,360 per month plus $570 per press run plus $910 per book set-up. The
company expected its activity in May to be 194 press runs and 74 book set-ups, but the
actual activity was 195 press runs and 72 book set-ups. The actual cost for wages and
salaries in May was $188,370.
The spending variance for wages and salaries in May would be closest to:
A.$2,090 F
B.$3,340 U
C.$3,340 F
D.$2,090 U
8) Tropiano Electronics Corporation has a standard cost system in which it applies
manufacturing overhead to products on the basis of standard machine-hours (MHs). The
company had budgeted its fixed manufacturing overhead cost at $62,100 for the month
and its level of activity at 3,200 MHs. The actual total fixed manufacturing overhead
was $61,600 for the month and the actual level of activity was 3,000 MHs. What was
the fixed manufacturing overhead budget variance for the month to the nearest dollar?
A.$3,381 Unfavorable
B.$500 Favorable
C.$500 Unfavorable
D.$3,381 Favorable
9) JT Department Store expects to generate the following sales for the next three
months:
JT’s cost of gods sold is 60% of sales dollars. At the end of each month, JT wants a
merchandise inventory balance equal to 20% of the following month’s expected cost of
goods sold. What dollar amount of merchandise inventory should JT plan to purchase in
August?
A.$257,400
B.$314,600
C.$352,800
D.$327,800
10) The company’s working capital is:
A.$671,000
B.$665,000
C.$418,000
D.$983,000
11) The working capital at the end of Year 2 is:
A.$600
B.$1,000
C.$880
D.$240
12) Conversion cost was:
A) $200,000
B) $240,000
C) $265,000
D) $415,000
13) Sirmons Corporation manufactures and sells one product. The following
information pertains to the company’s first year of operations:
The company does not have any variable manufacturing overhead costs or variable
selling and administrative costs. During its first year of operations, the company
produced 46,000 units and sold 45,000 units. The company’s only product is sold for
$249 per unit.
Assume that the company uses an absorption costing system that assigns $19 of direct
labor cost and $55 of fixed manufacturing overhead to each unit that is produced. The
net operating income under this costing system is:
A.$1,321,000
B.$1,225,000
C.$1,395,000
D.$1,340,000
14) Bakerston Company is a manufacturing firm that uses job-order costing. The
company’s inventory balances were as follows at the beginning and end of the year:
The company applies overhead to jobs using a predetermined overhead rate based on
machine-hours. At the beginning of the year, the company estimated that it would work
33,000 machine-hours and incur $231,000 in manufacturing overhead cost. The
following transactions were recorded for the year:
Raw materials were purchased, $315,000.
Raw materials were requisitioned for use in production, $307,000 ($281,000 direct and
$26,000 indirect).
The following employee costs were incurred: direct labor, $377,000; indirect labor,
$96,000; and administrative salaries, $172,000.
Selling costs, $147,000.
Factory utility costs, $10,000.
Depreciation for the year was $127,000 of which $120,000 is related to factory
operations and $7,000 is related to selling, general, and administrative activities.
Manufacturing overhead was applied to jobs. The actual level of activity for the year
was 34,000 machine-hours.
Sales for the year totaled $1,253,000.
Required:
a. Prepare a schedule of cost of goods manufactured.
b. Was the overhead underapplied or overapplied? By how much?
c. Prepare an income statement for the year. The company closes any underapplied or
overapplied overhead to Cost of Goods Sold.
15) Belsky Corporation has provided the following data from its activity-based costing
system:
The company makes 490 units of product Q19S a year, requiring a total of 1,080
machine-hours, 60 orders, and 20 inspection-hours per year. The product’s direct
materials cost is $46.42 per unit and its direct labor cost is $20.22 per unit.
According to the activity-based costing system, the average cost of product Q19S is
closest to:
A.$97.64 per unit
B.$66.64 per unit
C.$93.31 per unit
D.$94.79 per unit
16) Kaelker Corporation reports that at an activity level of 7,000 units, its total variable
cost is $590,730 and its total fixed cost is $372,750. What would be the total cost, both
fixed and variable, at an activity level of 7,100 units? Assume that this level of activity
is within the relevant range.
A) $963,480
B) $977,244
C) $971,919
D) $970,362
17) What is the net total dollar advantage (disadvantage) of purchasing the part rather
than making it?
A.$264,000
B.$(328,000)
C.$548,000
D.$(64,000)
18) Which of the following would be classified as an appraisal cost on a quality cost
report?
A.Re-entering data because of keying errors.
B.Quality data gathering, analysis, and reporting.
C.Debugging software errors.
D.Test and inspection of in-process goods.
19) The company’s price-earnings ratio is closest to:
A.19.79
B.0.51
C.8.36
D.12.53
20) The company’s average sale period (turnover in days) for Year 2 is closest to:
A.65.6 days
B.226.6 days
C.43.8 days
D.70.6 days