Question : 51. Wilson Company applies overhead based direct labor cost. During 2012, : 1208053

51. Wilson Company applies overhead based on direct labor cost. During 2012, Wilson Company estimated that it would incur $90,000 in manufacturing overhead costs and $60,000 of direct labor costs. In 2012, actual manufacturing overhead cost totaled $75,000 and actual direct labor costs totaled $55,000. If total manufacturing costs were $160,000, what amount of direct materials was used during the period? 
A. $15,000
B. $30,000
C. $22,500
D. None of the other answers are correct.

52. Traditionally, direct labor hours have been widely used as a base for the allocation of overhead for all of the following reasons except: 
A. There is a logical link between the usage of direct labor hours and the incurrence of overhead costs.
B. In a low technology environment labor is predominately responsible for the production of goods.
C. For payroll purposes accurate records are kept of labor hours.
D. Using labor hours as an allocation base assigns an equal amount of overhead to each unit of inventory even when products require differential labor inputs.

53. A credit to the work in process account represents the: 
A. Cost of goods available for sale.
B. Cost of goods manufactured.
C. Cost of materials used.
D. Cost of goods sold.

54. A credit to the finished goods account represents the: 
A. Cost of goods available for sale.
B. Cost of goods manufactured.
C. Cost of materials used.
D. Cost of goods sold.

55. Select the response that best illustrates the point that product cost flows are cyclical and occur in a specific sequence. 
A. Acquire finished goods, acquire raw materials, convert raw materials, collect cash
B. Acquire raw materials, convert raw materials, sell finished goods, collect cash
C. Sell finished goods, collect cash, acquire raw materials
D. Collect cash, acquire raw materials, sell finished goods

56. Taylor Company’s work in process account increased by $1,000 while its finished goods account decreased by $500. Assuming total manufacturing costs were $5,000, what was the company’s cost of goods sold amount? 
A. $5,500
B. $4,500
C. $4,000
D. $3,500

57. The Johnson Corporation was started on January 1, 2012. The company incurred the following transactions during the year (Assume all transactions involve cash):
1) Acquired $1,000 of capital from the owners.
2) Purchased $300 of direct raw materials.
3) Used $200 of these direct raw materials in the production process.
4) Paid production workers $400 cash.
5) Paid $200 for manufacturing overhead (applied and actual overhead are the same).
6) Started and completed 200 units of inventory.
7) Sold 50 units at a price of $6 each.
8) Paid $40 for selling and administrative expenses.
The amount of cost of goods manufactured would be: 
A. $1,000.
B. $900.
C. $800.
D. $600.

58. Truman Company started the accounting period with the following beginning balances:
raw materials, $42,000; work in process, $90,000; finished goods, $20,000
During the accounting period, the company purchased $60,000 of raw materials and ended the period with $16,000 in raw material inventory. Direct labor costs for the period were $120,000 and $36,000 of manufacturing overhead costs was allocated to work in process. There was no over or underapplied overhead. Ending work in process was $82,000 and ending finished goods inventory was $35,000. Goods were sold during the period for $350,000. The amount of cost of goods manufactured (i.e., amount transferred from work in process to finished goods) would be: 
A. $235,000.
B. $242,000.
C. $250,000.
D. $332,000.

59. The Nixon Corporation was started on January 1, 2012. The company entered into the following transactions during the year (Assume all transactions involve cash):
1) Acquired $1,000 of capital from the owners.
2) Purchased $300 of direct raw materials.
3) Used $200 of these direct raw materials in the production process.
4) Paid production workers $400 cash.
5) Paid $200 for manufacturing overhead (applied and actual overhead are the same).
6) Started and completed 200 units of inventory.
7) Sold 50 units at a price of $6 each.
8) Paid $40 for selling and administrative expenses.
The amount of net income for 2012 was: 
A. $100.
B. $75.
C. $60.
D. $50.

60. Truman Company started the accounting period with the following beginning balances in 2012:
raw materials, $42,000; work in process, $90,000; finished goods, $20,000
During the accounting period, the company purchased $60,000 of raw materials and ended the period with $16,000 in raw material inventory. Direct labor costs for the period were $120,000 and $36,000 of manufacturing overhead costs was allocated to work in process. There was no over or underapplied overhead. Ending work in process was $82,000 and ending finished goods inventory was $35,000. Goods were sold during the period for revenue of $350,000. How much gross margin would be reported in 2012? 
A. $100,000
B. $115,000
C. $135,000
D. $161,000