38) When recording the direct labor costs in transaction (c) above, the Work in Process inventory
account will increase (decrease) by:
A) $201,300
B) ($201,300)
C) $209,745
D) ($209,745)
39) When applying fixed manufacturing overhead to production in transaction (d) above, the Work
in Process inventory account will increase (decrease) by:
A) ($109,800)
B) $22,400
C) $109,800
D) ($22,400)
40) 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) $746,640
B) ($771,325)
C) ($746,640)
D) $771,325
43
Neuhaus 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
1.7
gallons
$
7.50
$
12.75
Direct labor
0.70
hours
$
21.50
15.05
Fixed manufacturing overhead
0.70
hours
$
6.00
4.20
Total standard cost per unit
$
32.00
During the year, the company completed the following transactions:
a. Purchased 52,900 gallons of raw material at a price of $7.60 per gallon.
b. Used 46,820 gallons of the raw material to produce 27,600 units of work in process.
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
$1,160,000
$45,900
$0
$67,200
$757,400
=
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
$2,030,500
a.
b.
41) When recording the raw materials purchases in transaction (a) above, the Raw Materials
inventory account will increase (decrease) by:
A) $396,750
B) ($402,040)
C) $402,040
D) ($396,750)
42) When recording the raw materials purchases in transaction (a) above, the Cash account will
increase (decrease) by:
A) ($396,750)
B) ($402,040)
C) $402,040
D) $396,750
43) When recording the raw materials used in production in transaction (b) above, the Raw
Materials inventory account will increase (decrease) by:
A) ($355,832)
B) $355,832
C) $351,150
D) ($351,150)
44) When the purchase of raw materials is recorded in transaction (a) above, which of the
following entries will be made?
A) $5,290 in the Materials Price Variance column
B) ($5,290) in the Materials Price Variance column
C) $5,290 in the Materials Quantity Variance column
D) ($5,290) in the Materials Quantity Variance column
45) When the raw materials used in production are recorded in transaction (b) above, which of the
following entries will be made?
A) $750 in the Materials Quantity Variance column
B) $750 in the Materials Price Variance column
C) ($750) in the Materials Quantity Variance column
D) ($750) in the Materials Price Variance column
48
Bohon 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
1.0
pounds
$
5.50
per pound
$
5.50
During the year, the company completed the following transactions concerning direct materials:
a. Purchased 19,700 pounds of raw material at a price of $4.70 per pound.
b. Used 18,500 pounds of the raw material to produce 18,400 units of work in process.
The company calculated the following direct materials variances for the year:
Materials price variance
$
15,760
F
Materials quantity variance
$
550
U
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
$1,030,000
$53,350
$0
$88,880
$737,900
=
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
$1,910,130
a.
b.
46) When recording the raw materials purchases in transaction (a) above, the Raw Materials
inventory account will increase (decrease) by:
A) ($92,590)
B) $108,350
C) $92,590
D) ($108,350)
47) When recording the raw materials purchases in transaction (a) above, the Cash account will
increase (decrease) by:
A) ($92,590)
B) ($108,350)
C) $108,350
D) $92,590
48) When recording the raw materials used in production in transaction (b) above, the Raw
Materials inventory account will increase (decrease) by:
A) ($86,950)
B) $101,750
C) $86,950
D) ($101,750)
49) When recording the raw materials used in production in transaction (b) above, the Work in
Process inventory account will increase (decrease) by:
A) $101,200
B) ($101,200)
C) $101,750
D) ($101,750)
50) When the purchase of raw materials is recorded in transaction (a) above, which of the
following entries will be made?
A) $15,760 in the Materials Quantity Variance column
B) ($15,760) in the Materials Price Variance column
C) ($15,760) in the Materials Quantity Variance column
D) $15,760 in the Materials Price Variance column
51) When the raw materials used in production are recorded in transaction (b) above, which of the
following entries will be made?
A) ($550) in the Materials Price Variance column
B) ($550) in the Materials Quantity Variance column
C) $550 in the Materials Price Variance column
D) $550 in the Materials Quantity Variance column
53
Ester 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
1.9
gallons
$
6.50
per gallon
$
12.35
Direct labor
0.80
hours
$
18.00
per hour
14.40
Fixed manufacturing overhead
0.80
hours
$
7.00
per hour
5.60
Total standard cost per unit
$
32.35
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing
overhead of $168,000 and budgeted activity of 24,000 hours.
During the year, the company applied fixed overhead to the 22,600 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 $149,800. Of this total, $83,800 related to
items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $66,000
related to depreciation of manufacturing equipment.
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
$1,010,000
$54,340
$0
$74,405
$466,600
=
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
$1,605,345
52) When applying fixed manufacturing overhead to production, the Work in Process inventory
account will increase (decrease) by:
A) $83,800
B) ($83,800)
C) $126,560
D) ($126,560)
53) When the fixed manufacturing overhead cost is recorded, which of the following entries will
be made?
A) $18,200 in the FOH Volume Variance column
B) $18,200 in the FOH Budget Variance column
C) ($18,200) in the FOH Budget Variance column
D) ($18,200) in the FOH Volume Variance column
54) When the fixed manufacturing overhead cost is recorded, which of the following entries will
be made?
A) ($41,440) in the FOH Budget Variance column
B) ($41,440) in the FOH Volume Variance column
C) $41,440 in the FOH Volume Variance column
D) $41,440 in the FOH Budget Variance column
56
Decena 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. Information concerning the direct labor standards for the
company’s only product is as follows:
Inputs
Standard
Quantity
or Hours
Standard Price
or Rate
Standard
Cost
Direct materials
0.90
hours
$
18.00
per hour
$
16.20
During the year, the company assigned direct labor costs to work in process. The direct labor
workers (who were paid in cash) worked 15,830 hours at an average cost of $18.50 per hour. The
company calculated the following direct labor variances for the year:
Labor rate variance
$
7,915
U
Labor efficiency variance
$
1,800
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
$1,070,000
$54,910
$0
$84,945
$425,600
=
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
$1,635,455
55) When recording the direct labor costs, the Work in Process inventory account will increase
(decrease) by:
A) ($292,855)
B) $286,740
C) $292,855
D) ($286,740)
56) When recording the direct labor costs, the Cash account will increase (decrease) by:
A) ($286,740)
B) ($292,855)
C) $286,740
D) $292,855
57) When the direct labor cost is recorded, which of the following entries will be made?
A) ($7,915) in the Labor Efficiency Variance column
B) $7,915 in the Labor Rate Variance column
C) $7,915 in the Labor Efficiency Variance column
D) ($7,915) in the Labor Rate Variance column
58) When the direct labor cost is recorded, which of the following entries will be made?
A) $1,800 in the Labor Efficiency Variance column
B) ($1,800) in the Labor Rate Variance column
C) $1,800 in the Labor Rate Variance column
D) ($1,800) in the Labor Efficiency Variance column
60
Jakeman 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
3.4
gallons
$
7.00
per gallon
$
23.80
Direct labor
0.90
hours
$
19.50
per hour
17.55
Fixed manufacturing overhead
0.90
hours
$
13.00
per hour
11.70
Total standard cost per unit
$
53.05
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing
overhead of $351,000 and budgeted activity of 27,000 hours.
During the year, the company completed the following transactions:
a. Purchased 76,600 gallons of raw material at a price of $7.90 per gallon.
b. Used 70,960 gallons of the raw material to produce 20,900 units of work in process.
c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in
cash) worked 18,710 hours at an average cost of $19.40 per hour.
d. Applied fixed overhead to the 20,900 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 $334,600. Of this total, $252,600 related to items such as
insurance, utilities, and indirect labor salaries that were all paid in cash and $82,000 related to
depreciation of manufacturing equipment.
e. Completed and transferred 20,900 units from work in process to finished goods.
f. Sold (for cash) 17,700 units to customers at a price of $74.30 per unit.
g. Transferred the standard cost associated with the 17,700 units sold from finished goods to cost
of goods sold.
h. Paid $93,000 of selling and administrative expenses.
i. Closed all standard cost variances to cost of goods sold.
The company calculated the following variances for the year:
Materials price variance
$
68,940
U
Materials quantity variance
$
700
F
Labor rate variance
$
1,871
F
Labor efficiency variance
$
1,950
F
Fixed manufacturing overhead budget variance
$
16,400
F
Fixed manufacturing overhead volume variance
$
106,470
U