1) maple mount fishery is a canning company in astoria. the company uses a normal
costing system in which factory overhead is applied on the basis of direct labor costs.
budgeted factory overhead for the year was $680,400, and management budgeted
$324,000 of direct labor costs. during the year, the company incurred the following
actual costs.
the january 1 balances of inventory accounts are shown below.
the december 31 balances of these inventory accounts were ten percent lower.
the adjusted cost of goods sold, after under-or overapplied overhead, is:
a.$1,332,600
b.$1,354,700
c.$1,357,600
d.$1,373,600
e.$1,339,300
2) a manager of a small manufacturing firm is interested in knowing what the
company’s product costs are. which of the following would be considered a product cost
for the manager’s company?
a.direct materials
b.product design cost
c.office expenses
d.selling expenses
e.advertising expense
3) which of the following companies uses process costing systems?
a.accenture
b.coca-cola
c.jiffy lube international
d.a professional service firm
e.all of the above
4) maple mount fishery is a canning company in astoria. the company uses a normal
costing system in which factory overhead is applied on the basis of direct labor costs.
budgeted factory overhead for the year was $680,400, and management budgeted
$324,000 of direct labor costs. during the year, the company incurred the following
actual costs.
the january 1 balances of inventory accounts are shown below.
the december 31 balances of these inventory accounts were ten percent lower.
the amount of direct materials purchased during the year is:
a.$391,000
b.$388,000
c.$377,000
d.$380,000
e.$374,000
5) landry co. had the following information for the month of december. all direct
materials were one hundred percent complete, and beginning materials cost $14,000.
total equivalent units for conversion under the fifo method are calculated to be:
a.1,110 equivalent units
b.1,080 equivalent units
c.1,032 equivalent units
d.1,008 equivalent units
e.1,320 equivalent units
6) based on analyzing the relationship of total factory overhead (y) to direct labor hours
(x). the following relationship was found:
y = $1,000 + $2x
the use of a relationship of total factory overhead to direct labor hours is said to be valid
only within the relevant range, which means:
a.within a reasonable dollar amount for labor costs
b.within the range of observations of the cost driver
c.within the range of reasonableness as judged by the department supervisor
d.within the budget allowance for overhead
7) which of the following is not true regarding the use of linear compensation plans?
a.such plans encourage “gaming” behavior on the part of managers
b.such plans strongly link managerial compensation to the agreed-upon budget
c.under such plans, managerial reward is independent of budgetary targets
d.under such plans, managerial reward is based principally on actual performance
e.under such plans, managerial reward is based on what managers actually do, not what
they do relative to what they say they can do
8) edenton boat company manufactures small pleasure boats on an assembly-line basis.
the units are started in the department a. on july 1 of this year, the work-in-process
inventory of the department a consisted of 200 units 100% complete as to materials and
40% complete as to conversion. during the month, 400 units were started and 500 units
were completed and transferred out. the work-in-process on july 31 was 100% complete
as to materials and 30% complete as to conversion.
costs in process at the beginning of the period amounted to $600,000 for materials and
$160,000 for conversion. costs added during the period were materials costs of
$1,802,700 and conversion costs of $905,512.
required: prepare a production cost report using the weighted-average method.
9) product costing provides useful cost information for all the following except:
a.both manufacturing and non-manufacturing firms
b.for non-manufacturing firms
c.management planning, cost control, and performance evaluation
d.financial statement reporting
e.identifying and hiring competent managers
10) quirch inc. manufactures machine parts for aircraft engines. the ceo, chucky valters,
was considering an offer from a subcontractor who would provide 2,400 units of
product pq107 for valters for a price of $150,000. if quirch does not purchase these
parts from the subcontractor it must produce them in-house with the following costs:
in addition to the above costs, if quirch produces part pq107, it would also have a
retooling and design cost of $9,800. the relevant costs of producing 2,400 units of
product pq107 are:
a.$149,000
b.$129,800
c.$150,000
d.$164,200
e.$148,300
11) the following information was taken from the accounting records of elliott
manufacturing corp. unfortunately, some of the data were destroyed by a computer
malfunction.
cost of goods sold is calculated to be:
a.$32,000
b.$30,000
c.$33,000
d.$38,000
e.$27,000