1) ermoin corporation uses the weighted-average method in its process costing system.
this month, the beginning inventory in the first processing department consisted of 600
units. the costs and percentage completion of these units in beginning inventory were:
a total of 5,700 units were started and 4,700 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 75% complete with respect to materials and 20% 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 per equivalent unit for materials for the month in the first processing
department is closest to:
a.$8.25
b.$7.73
c.$7.59
d.$7.11
2) last year marmin company sold equipment with a net book value of $120,000 for
$160,000 in cash. this equipment was originally purchased for $230,000. what will be
the net effect of this transaction on the net cash provided by investing activities on last
year’s statement of cash flows?
a.a net deduction of $40,000 from cash
b.a net addition of $40,000 to cash
c.a net deduction of $70,000 from cash
d.a net addition of $70,000 to cash
3) on july 1, woolard corporation had $20,000 of raw materials on hand. during the
month, the company purchased an additional $53,000 of raw materials. during july,
$49,000 of raw materials were requisitioned from the storeroom for use in production.
these raw materials included both direct and indirect materials. the indirect materials
totaled $5,000.
prepare journal entries to record these events.
the credits to the manufacturing overhead account as a consequence of the raw
materials transactions in july total:
a.$0
b.$5,000
c.$49,000
d.$44,000
4) a manufacturing company that produces a single product has provided the following
data concerning its most recent month of operations:
what is the total period cost for the month under variable costing?
a.$151,800
b.$51,800
c.$100,000
d.$125,900
5) a manufacturing company that has only one product has established the following
standards for its variable overhead. the company uses direct labor-hours (dlhs) as its
measure of activity.
the following data pertain to operations for the last month:
what is the variable overhead efficiency variance for the month?
a.$504 u
b.$1,120 u
c.$1,120 f
d.$1,144 f
6) bob is a quality inspector on the assembly line of a manufacturing company. he is
paid $16 per hour for regular time and time and a half for all work in excess of 40 hours
per week. he is classified as a direct labor worker.
bob works 44 hours during a week in which there was no idle time. the allocation of
bob’s wages for the week between direct labor cost and manufacturing overhead cost
would be:
a.choice a
b.choice b
c.choice c
d.choice d
7) excerpts from dinis corporation’s most recent balance sheet (in thousands of dollars)
appear below:
sales on account during the year totaled $1,240 thousand. cost of goods sold was $770
thousand.
required:
compute the following for year 2:
a. working capital.
b. current ratio.
c. acid-test ratio.
d. accounts receivable turnover.
e. average collection period.
f. inventory turnover.
g. average sale period.
8) lucy sportswear manufactures a specialty line of t-shirts. the company uses a
job-order costing system. during march, the following costs were incurred on job icu2:
direct materials $13,700 and direct labor $4,800. in addition, selling and shipping costs
of $7,000 were incurred on the job. manufacturing overhead was applied at the rate of
$25 per machine-hour and job icu2 required 800 machine-hours. if job icu2 consisted of
7,000 shirts, the cost of goods sold per shirt was:
a.$6.50
b.$6.00
c.$5.70
d.$5.50
9) mouw inc. bases its manufacturing overhead budget on budgeted direct labor-hours.
the direct labor budget indicates that 5,400 direct labor-hours will be required in
january. the variable overhead rate is $4.40 per direct labor-hour. the company’s
budgeted fixed manufacturing overhead is $77,220 per month, which includes
depreciation of $9,720. all other fixed manufacturing overhead costs represent current
cash flows. the january cash disbursements for manufacturing overhead on the
manufacturing overhead budget should be:
a.$67,500
b.$91,260
c.$100,980
d.$23,760
10) rinks inc. has provided the following data for the month of december. there were no
beginning inventories; consequently, the direct materials, direct labor, and
manufacturing overhead applied listed below are all for the current month.
manufacturing overhead for the month was underapplied by $1,000.
the company allocates any underapplied or overapplied overhead among work in
process, finished goods, and cost of goods sold at the end of the month on the basis of
the overhead applied during the month in those accounts.
the journal entry to record the allocation of any underapplied or overapplied overhead
for december would include the following:
a.debit to finished goods of $120
b.credit to finished goods of $42,480
c.debit to finished goods of $42,480
d.credit to finished goods of $120
11) the cost(s) that stewart company would classify as fixed would be:
a.insurance
b.insurance and lubrication
c.supplies and lubrication
d.insurance and advertising
12) viren corporation has provided the following data from its activity-based costing
system:
the company makes 240 units of product t91h a year, requiring a total of 550
machine-hours, 90 orders, and 40 inspection-hours per year. the product’s direct
materials cost is $16.98 per unit and its direct labor cost is $12.09 per unit.
according to the activity-based costing system, the average cost of product t91h is
closest to:
a.$79.66 per unit
b.$90.81 per unit
c.$29.07 per unit
d.$75.70 per unit
13) machowski corporation has provided the following partial listing of costs incurred
during november:
required:
a. what is the total amount of product cost listed above? show your work.
b. what is the total amount of period cost listed above? show your work.