1. The development of just-in-time (JIT) methods of production focused on:
increasing sales revenue.
reducing inventories.
increasing customer service.
reducing operating expenses.
2. For a manufacturing company, which of the following is an example of a period cost rather than a product cost?
Wages of salespersons
Salaries of machine operators
Insurance on factory equipment
Depreciation of factory equipment
3. During 2009, a manufacturing company had the following operating results:
Beginning work-in-process inventory$ 45,000
Beginning finished goods inventory$190,000
Direct materials used in production$308,000
Direct labor$475,000
Manufacturing overhead incurred$250,000
Ending work-in-process inventory$ 67,000
Ending finished goods inventory$ 89,000
What is the cost of goods sold for 2009?
$1,011,000
$1,134,000
$1,033,000
$1,112,000
4. How would a 5% sales commission paid to sales personnel be classified in a manufacturing company?
Fixed, period cost
Fixed, product cost
Variable, period cost
Variable, product cost
5. 2,000 units were produced and sold.
Sales price per unit$ 800 per unit
Fixed costs:
Marketing and administrative$400,000 per period
Manufacturing overhead$200,000 per period
Variable costs:
Marketing and administrative$50 per unit
Manufacturing overhead$80 per unit
Direct labor$100 per unit
Direct materials$200 per unit
What is the full cost per unit of making and selling the product?
$430
$480
$530
$730
6. Mukwonago Industries has developed two new products, but it has enough plant capacity to introduce only one product during the current year. The following data will assist management in deciding which product should be selected.
Mukwonago’s fixed overhead includes rent and utilities, equipment depreciation, and supervisory salaries. Selling and administrative expenses are not allocated to individual products.
Product LProduct W
Direct materials$44$36
Machining ($12/hour)1815
Assembly ($10/hour)3010
Variable overhead ($8/hour)3618
Fixed overhead ($4/hour)189
Total cost$146$88
Estimated selling price per unit$170$100
Actual research and development costs$240,000$175,000
Estimated advertising costs$500,000$350,000
For Mukwonago’s Product L, the unit costs for direct material, machining, and assembly represent: (Points : 4)
conversion costs.
period costs.
prime costs.
fixed costs.
7. The following pertains to Clove Co. for the year ending December 31, 2008:
Budgeted sales$1,000,000
Break-even sales$700,000
Budgeted contribution margin$600,000
Cashflow breakeven$200,000
Clove’s margin of safety is:
$300,000.
$400,000.
$500,000.
$800,000.
8. The CJP Company produces 10,000 units of item S10 annually at a total cost of $190,000.
Direct materials$20,000
Direct labor$55,000
Variable overhead$45,000
Fixed overhead $70,000
Total $190,000
The XYZ Company has offered to supply 10,000 units of S10 per year for $18 per unit. If CJP accepts the offer, $4 per unit of the fixed overhead would be saved. In addition, some of CJP’s facilities could be rented to a third party for $15,000 per year. What are the relevant costs for the “make” alternative?
$160,000
$165,000
$175,000
$185,000
9. The Chambers Manufacturing Company recorded overhead costs of $14,182 at an activity level of 4,200 machine hours and $8,748 at 2,300 machine hours. The records also indicated that overhead of $9,730 was incurred at 2,600 machine hours. Using the high-low method to estimate the cost equation, determine the variable cost per machine hour.
$2.78
$2.86
$3.10
$3.38
10. The following information has been gathered for the GHI Manufacturing Company for its fiscal year ending December 31:
Actual manufacturing OC $212,500
Actual direct labor hours 54,900
Actual direct labor costs $445,000
Estimated man. OC $210,000
Estimated direct labor $434,000
Estimated DL hours 56,000
What is the predetermined manufacturing overhead rate per direct labor hour?
$3.87
$3.79
$3.83
$3.75
11. What is the amount transferred in for Case B?
Case B
Beginning balance$15,100
Ending balance$11,400
Transferred in???
Transferred out$93,200
$96,900
$119,700
$89,500
$66,700
12. The following information has been gathered for Roswell Machining for its fiscal year ending December 31:
What is the predetermined factory overhead rate per labor hour?
$29.01
$31.25
$37.01
$34.36
13. Lo-crete produces quick setting concrete mix. Production of 200,000 tons was started in April and 190,000 tons were completed. Material costs were $3,152,000 for the month while conversion costs were $591,000. There was no beginning work-in-process; the ending work-in-process was 70 percent complete. What is the cost of the product that was completed and transferred to finished goods?
$3,610,000
$3,555,850
$2,994,400
$3,743,000
