1) Jane Industries manufactures plastic toys. During October, Jane’s Fabrication
Department started work on 10,000 models. During the month, the company completed
11,000 models, and transferred them to the Distribution Department. The company
ended the month with 1,500 models in ending inventory. There were 2,500 models in
beginning inventory. All direct materials costs are added at the beginning of the
production cycle and conversion costs are added uniformly throughout the production
process. The FIFO method of process costing is being followed. Beginning work in
process was 25% complete as to conversion costs, while ending work in process was
50% complete as to conversion costs.
How many of the units that were started and completed during October?
A) 13,500
B) 8,500
C) 9,000
D) 10,000
2) When using a normal costing system, manufacturing overhead is allocated using the
________ manufacturing overhead rate and the ________ quantity of the allocation
base.
A) budgeted; actual
B) budgeted; budgeted
C) actual; budgeted
D) actual; actual
3) What is the operating income using variable costing?
A) $125,125
B) $85,125
C) $65,000
D) $60,125
4) Strategic Analysis of Profitability of Ransham Company:
Income Statement Amounts in 2014 Revenue and Cost Effects of Growth
Component in 2015 Revenue and Cost Effects of Price-Recovery Component in
2015 Cost Effect of Productivity Component in 2015 Income Statement Amounts
in 2015
Revenues ($) 34,000 10,000 F 1,000 U (b) (e)
Costs 23,500 (a) 500 U (c) 26,100
Operating income 10,500 5,500 F 1,500 U 2,400 F (d)
What is the cost effect of the productivity component (c)?
A) $0
B) $1,200 U
C) $900 F
D) $2,400 F
5) Crimson Services, Inc., employs 8 individuals. They are all paid $16.50 per hour.
How would total costs of personnel be classified?
A) variable cost
B) mixed cost
C) irrelevant cost
D) fixed cost
6) Job-cost records for Boucher Company contained the following data:
Required:
a.Compute WIP inventory at June 30
b.Compute finished goods inventory at June 30
c.Compute cost of goods sold for June
7) Russo Corporation manufactured 16,000 air conditioners during November. The
overhead cost-allocation base is $31.50 per machine-hour. The following variable
overhead data pertain to November:
What is the total variable overhead variance
A) $7,875 unfavorable
B) $3,937.50 f unfavorable
C) $7,875 favorable
D) $3,937.50 f favorable
8) The Charmatz Corporation has a central copying facility. The copying facility has
only two users, the Marketing Department and the Operations Department. The
following data apply to the coming budget year:
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Marketing Department was 80,000 copies and by the
Operations Department was 360,000 copies.
If a dual-rate cost-allocation method is used, what amount of copying facility costs will
be allocated to the Operations Department? Assume budgeted usage is used to allocate
fixed copying costs and actual usage is used to allocate variable copying costs.
A) $60,490
B) $59,890
C) $57,000
D) $56,400
9) Bernard Company’s budgeted manufacturing overhead is $3,300,000. Overhead is
allocated on the basis of direct labor hours. The budgeted direct labor hours for the
period are 60,000. What is the manufacturing overhead rate?
A) $47.00
B) $56.00
C) $75.00
D) $55.00
10) For 2014, Bakers Manufacturing uses machine-hours as the only overhead
cost-allocation base. The direct cost rate is $3.00 per unit. The selling price of the
product is $20.00. The estimated manufacturing overhead costs are $240,000 and
estimated 40,000 machine hours. The actual manufacturing overhead costs are
$300,000 and actual machine hours are 50,000.
What is the profit margin earned if each unit requires two machine-hours?
A) 53.33%
B) 33.33%
C) 66.67%
D) 58.73%