Question : 41.Garst Manufacturing working two jobs. Cost accumulated under a job : 1257060

 

 

41.Garst Manufacturing is working on two jobs. Cost is accumulated under a job order cost system, and overhead is applied on the basis of direct labor hours. The company estimated that overhead would be $64,000 and 10,000 direct labor hours would be worked. Both projects were started and completed in the current accounting period. The following transactions were completed during the period:(a) Used $10,000 of direct material on Project I and $6,800 of direct material on Project II.(b) Labor costs for the two jobs amounted to the following: Project I, $24,000 (2,000 hours); Project II, $44,000 (6,000 hours).(c) Project II was sold during the period for $120,000.The ending balance in work in process was:   

A. $34,000.

 

B. $0.

 

C. $46,800.

 

D. $136,000.

 

 

42.Bates Manufacturing uses a job order cost system, and overhead is applied on the basis of direct labor hours. At the beginning of the period, the company estimated that overhead would be $64,000 and 10,000 direct labor hours would be worked. Two projects were started and completed in the current accounting period. The following transactions were completed during the period:(a) Used $10,000 of direct material on Project I and $6,800 of direct material on Project II.(b) Labor costs for the two jobs amounted to the following: Project I, $24,000 (2,000 hours); Project II, $44,000 (6,000 hours).(c) Project II was sold during the period for $120,000.The company’s gross margin for the period was (Do not round your intermediate calculation):   

A. $30,800.

 

B. $18,000.

 

C. $89,200.

 

D. $69,200.

 

 

43.Select the incorrect statement regarding the recognition of depreciation on manufacturing equipment.   

A. Recognizing depreciation on manufacturing equipment is an asset exchange event.

 

B. Depreciation on manufacturing equipment is an indirect product cost.

 

C. Recognizing depreciation on manufacturing equipment decreases the equipment’s book value and increases the manufacturing overhead account.

 

D. If the equipment was used to work on a job, the amount of depreciation must be entered on the appropriate job cost sheet.

 

 

44.Which of the following statements regarding a process cost system is false?   

A. Use of a process cost system would be appropriate for a company that manufactures luxury yachts.

 

B. Unit costs are computed for each department.

 

C. The number of equivalent whole units for a period takes into account the stage of completion of ending work in process inventory.

 

D. Unit cost is determined for a designated period of time.

 

 

45.Bruce Company experienced an event that affected its financial statements as indicated below:  What type of product costing system is being used by this company?   

A. Job-order cost system

 

B. Hybrid cost system

 

C. Process cost system

 

D. None of these.

 

 

46.Gaither Company uses a process cost system. The following data applies to January 2014.  The ending work in process inventory is 90% complete. The total number of equivalent units for January was:   

A. 25,600.

 

B. 26,500.

 

C. 27,500.

 

D. 27,400.

 

 

47.Gibbons Company had 400 units of product in its work in process inventory at the beginning of the period. During the period 1,500 additional units of product were started. At the end of the period there were 750 units of product in the work in process account. The ending work in process inventory was estimated to be 30% complete. The beginning work in process inventory had a cost of $2,000. There were $42,000 of product costs added to work in process during the period. The number of equivalent units in ending work in process is:   

A. 450.

 

B. 750.

 

C. 1,275.

 

D. 225.

 

 

48.Kidd Company had 800 units of product in its work in process inventory at the beginning of the period. During the period 3,000 additional units of product were started. At the end of the period there were 1,500 units of product in the work in process account. The ending work in process inventory was estimated to be 30% complete. The beginning work in process inventory had a balance of $4,000. There were $84,000 of product costs added to work in process during the period. The amount of cost in ending work in process inventory is:   

A. $33,600.

 

B. $48,000.

 

C. $14,400.

 

D. $8,400.

 

 

49.Equivalent units of production would best be defined as:   

A. The number of whole units that could have been completed with direct material, direct labor and overhead used during the period.

 

B. Completed units that are produced through the same process.

 

C. Number of units transferred out during the period, regardless of when the units were started into production.

 

D. Units of production that are the same kind of product.

 

 

50.The Neptune Corporation uses a process cost system. The company started March with 2,300 units in work in process-Dept. A. During the month 4,000 units were started. At the end of the month there were 3,200 units in ending work in process-Dept. A inventory that were 30% complete. The beginning work in process balance was $120,270 and total manufacturing cost for the period was $304,000. Based on this information, the amount of cost transferred from work in process-Dept. A to work in process-Dept. B was:   

A. $323,950.

 

B. $127,281.

 

C. $271,667.

 

D. $100,320.