79) When recording the direct labor costs in transaction (c) above, the Cash account will increase
(decrease) by:
A) $458,896
B) $475,080
C) ($458,896)
D) ($475,080)
80) When applying fixed manufacturing overhead to production in transaction (d) above, the Work
in Process inventory account will increase (decrease) by:
A) $297,400
B) $462,240
C) ($462,240)
D) ($297,400)
81) When the work in process is completed and transferred to finished goods in transaction (e)
above, the Finished Goods inventory account will increase (decrease) by:
A) $2,096,130
B) ($2,096,130)
C) $2,098,894
D) ($2,098,894)
83
Kita Corporation manufactures one product. It does not maintain any beginning or ending Work in
Process inventories. The company uses a standard cost system in which inventories are recorded at
their standard costs. There is no variable manufacturing overhead. The standard cost card for the
company’s only product is as follows:
Inputs
Standard
Quantity
or Hours
Standard Price or Rate
Standard
Cost
Direct materials
3.3
pounds
$
7.50
$
24.75
Direct labor
0.80
hours
$
20.50
16.40
Fixed manufacturing overhead
0.80
hours
$
18.50
14.80
Total standard cost per unit
$
55.95
During the year, the company assigned direct labor costs to work in process. The direct labor
workers (who were paid in cash) worked 24,820 hours at an average cost of $21.20 per hour.
Assume that all transactions are recorded on the below worksheet, which is similar to the
worksheet shown in your text except that it has been divided into two parts so that it fits on one
page. The beginning balances in each of the accounts have been given. PP&E (net) stands for
Property, Plant, and Equipment net of depreciation.
Cash
Raw Materials
Work in
Process
Finished
Goods
PP&E (net)
1/1
$1,100,000
$49,500
$0
$50,355
$559,900
=
Materials
Price
Variance
Materials
Quantity
Variance
Labor Rate
Variance
Labor
Efficiency
Variance
FOH
Budget
Variance
FOH
Volume
Variance
Retained
Earnings
1/1
$0
$0
$0
$0
$0
$0
$1,759,755
82) When recording the direct labor costs, the Work in Process inventory account will increase
(decrease) by:
A) $526,184
B) ($514,960)
C) ($526,184)
D) $514,960
83) When recording the direct labor costs, the Cash account will increase (decrease) by:
A) ($514,960)
B) ($526,184)
C) $526,184
D) $514,960
84) When the direct labor cost is recorded, which of the following entries will be made?
A) $17,374 in the Labor Rate Variance column
B) $17,374 in the Labor Efficiency Variance column
C) ($17,374) in the Labor Efficiency Variance column
D) ($17,374) in the Labor Rate Variance column
85) When the direct labor cost is recorded in transaction (c) above, which of the following entries
will be made?
A) ($6,150) in the Labor Rate Variance column
B) $6,150 in the Labor Efficiency Variance column
C) $6,150 in the Labor Rate Variance column
D) ($6,150) in the Labor Efficiency Variance column
86
Lakatos Corporation manufactures one product. It does not maintain any beginning or ending
Work in Process inventories. The company uses a standard cost system in which inventories are
recorded at their standard costs. There is no variable manufacturing overhead. The standard cost
card for the company’s only product contains the following information concerning direct
materials:
Inputs
Standard Quantity
or Hours
Standard Price or
Rate
Standard
Cost
Direct materials
3.7
kilos
$
9.00
per kilo
$
33.30
During the year, the company completed the following transactions concerning direct materials:
a. Purchased 151,800 kilos of raw material at a price of $9.70 per kilo.
b. Used 140,870 kilos of the raw material to produce 38,100 units of work in process.
The company calculated the following direct materials variances for the year:
Materials price variance
$
106,260
U
Materials quantity variance
$
900
F
Assume that all transactions are recorded on the below worksheet, which is similar to the
worksheet shown in your text except that it has been divided into two parts so that it fits on one
page. The beginning balances in each of the accounts have been given. PP&E (net) stands for
Property, Plant, and Equipment net of depreciation.
Cash
Raw Materials
Work in
Process
Finished
Goods
PP&E (net)
1/1
$1,130,000
$59,940
$0
$81,510
$432,900
=
a.
=
b.
=
Materials
Price
Variance
Materials
Quantity
Variance
Labor Rate
Variance
Labor
Efficiency
Variance
FOH
Budget
Variance
FOH
Volume
Variance
Retained
Earnings
1/1
$0
$0
$0
$0
$0
$0
$1,704,350
a.
b.
86) When recording the raw materials purchases in transaction (a) above, the Cash account will
increase (decrease) by:
A) $1,472,460
B) ($1,366,200)
C) $1,366,200
D) ($1,472,460)
87) When recording the raw materials purchases in transaction (a) above, the Raw Materials
inventory account will increase (decrease) by:
A) $1,366,200
B) $1,472,460
C) ($1,366,200)
D) ($1,472,460)
88) When the purchase of raw materials is recorded in transaction (a) above, which of the
following entries will be made?
A) $106,260 in the Materials Quantity Variance column
B) ($106,260) in the Materials Quantity Variance column
C) ($106,260) in the Materials Price Variance column
D) $106,260 in the Materials Price Variance column
89) When recording the raw materials used in production in transaction (b) above, the Work in
Process inventory account will increase (decrease) by:
A) $1,267,830
B) $1,268,730
C) ($1,267,830)
D) ($1,268,730)
90) When recording the raw materials used in production in transaction (b) above, the Raw
Materials inventory account will increase (decrease) by:
A) $1,366,439
B) $1,267,830
C) ($1,366,439)
D) ($1,267,830)
91) When the raw materials used in production are recorded in transaction (b) above, which of the
following entries will be made?
A) ($900) in the Materials Quantity Variance column
B) ($900) in the Materials Price Variance column
C) $900 in the Materials Price Variance column
D) $900 in the Materials Quantity Variance column
90
Freiling Corporation manufactures one product. It does not maintain any beginning or ending
Work in Process inventories. The company uses a standard cost system in which inventories are
recorded at their standard costs. There is no variable manufacturing overhead. The standard cost
card for the company’s only product is as follows:
Inputs
Standard
Quantity
or Hours
Standard Price or
Rate
Standard
Cost
Direct materials
3.1
kilos
$
6.00
per kilo
$
18.60
Direct labor
0.90
hours
$
22.00
per hour
19.80
Fixed manufacturing overhead
0.90
hours
$
9.50
per hour
8.55
Total standard cost per unit
$
46.95
During the year, the company assigned direct labor costs to work in process. The direct labor
workers (who were paid in cash) worked 14,890 hours at an average cost of $22.80 per hour.
Assume that all transactions are recorded on the below worksheet, which is similar to the
worksheet shown in your text except that it has been divided into two parts so that it fits on one
page. The beginning balances in each of the accounts have been given. PP&E (net) stands for
Property, Plant, and Equipment net of depreciation.
Cash
Raw Materials
Work in
Process
Finished
Goods
PP&E (net)
1/1
$1,090,000
$53,940
$0
$79,815
$600,000
=
Materials
Price
Variance
Materials
Quantity
Variance
Labor Rate
Variance
Labor
Efficiency
Variance
FOH
Budget
Variance
FOH
Volume
Variance
Retained
Earnings
1/1
$0
$0
$0
$0
$0
$0
$1,823,755
92) When recording the direct labor costs, the Cash account will increase (decrease) by:
A) $339,492
B) ($318,780)
C) $318,780
D) ($339,492)
93) When recording the direct labor costs, the Work in Process inventory account will increase
(decrease) by:
A) $318,780
B) ($339,492)
C) $339,492
D) ($318,780)
94) When the direct labor cost is recorded in transaction (c) above, which of the following entries
will be made?
A) $8,800 in the Labor Rate Variance column
B) ($8,800) in the Labor Rate Variance column
C) $8,800 in the Labor Efficiency Variance column
D) ($8,800) in the Labor Efficiency Variance column
95) When the direct labor cost is recorded, which of the following entries will be made?
A) ($11,912) in the Labor Rate Variance column
B) $11,912 in the Labor Efficiency Variance column
C) ($11,912) in the Labor Efficiency Variance column
D) $11,912 in the Labor Rate Variance column
93
Arena Corporation manufactures one product. It does not maintain any beginning or ending Work
in Process inventories. The company uses a standard cost system in which inventories are recorded
at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no
variable manufacturing overhead.
The standard cost card for the company’s only product is as follows:
Inputs
Standard
Quantity
or Hours
Standard Price or Rate
Standard
Cost
Direct materials
1.2
pounds
$
5.50
per pounds
$
6.60
Direct labor
0.90
hours
$
21.00
per hour
18.90
Fixed manufacturing overhead
0.90
hours
$
4.50
per hour
4.05
Total standard cost per unit
$
29.55
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing
overhead of $81,000 and budgeted activity of 18,000 hours.
During the year, the company completed the following transactions:
a. Purchased 35,400 pounds of raw material at a price of $4.60 per pound.
b. Used 32,180 pounds of the raw material to produce 26,900 units of work in process.
c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in
cash) worked 23,810 hours at an average cost of $20.60 per hour.
d. Applied fixed overhead to the 26,900 units in work in process inventory using the
predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed
overhead costs for the year were $67,800. Of this total, $3,800 related to items such as insurance,
utilities, and indirect labor salaries that were all paid in cash and $64,000 related to depreciation of
manufacturing equipment.
e. Completed and transferred 26,900 units from work in process to finished goods.
f. Sold (for cash) 27,100 units to customers at a price of $36.60 per unit.
g. Transferred the standard cost associated with the 27,100 units sold from finished goods to cost
of goods sold.
h. Paid $149,000 of selling and administrative expenses.
i. Closed all standard cost variances to cost of goods sold.
94
The company calculated the following variances for the year:
Materials price variance
$
31,860
F
Materials quantity variance
$
550
F
Labor rate variance
$
9,524
F
Labor efficiency variance
$
8,400
F
Fixed manufacturing overhead budget
variance
$
13,200
F
Fixed manufacturing overhead volume
variance
$
27,945
F
To answer the following questions, you will need to record transactions a through i in the
worksheet below. This worksheet is similar to the worksheets in your text except that it has been
split into two parts to fit on the page. PP&E (net) stands for Property, Plant, and Equipment net of
depreciation.
Cash
Raw Materials
Work in
Process
Finished
Goods
PP&E (net)
1/1
$1,200,000
$29,700
$0
$70,920
$505,400
=
a.
=
b.
=
c.
=
d.
=
e.
=
f.
g.
h.
i.
Materials
Price
Variance
Materials
Quantity
Variance
Labor Rate
Variance
Labor
Efficiency
Variance
FOH
Budget
Variance
FOH
Volume
Variance
Retained
Earnings
1/1
$0
$0
$0
$0
$0
$0
1,806,020
a.
b.
c.
d.
e.
f.
g.
h.
i.
96) The ending balance in the Cash account will be closest to:
A) $1,534,734
B) $1,353,874
C) $185,734
D) $1,385,734
97) The ending balance in the Raw Materials account will be closest to:
A) $206,690
B) $224,400
C) $47,410
D) $11,990
98) The ending balance in the Work in Process account will be closest to:
A) $794,895
B) $685,950
C) $0
D) $177,540
99) The ending balance in the Finished Goods account will be closest to:
A) $865,815
B) $830,505
C) $76,830
D) $65,010
100) The ending balance in the PP&E (net) account will be closest to:
A) $501,600
B) $396,455
C) $441,400
D) $505,400
101) The ending balance in the Retained Earnings account at the end of the year is closest to:
A) $1,897,499
B) $1,939,554
C) $1,848,075
D) $1,672,486