Question : 21.During its first year of operations, Silverman Company paid $14,000 : 1257005

 

 

21.During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers’ wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit.What is Silverman’s cost of goods sold for the year?   

A. $50,000

 

B. $24,600

 

C. $30,000

 

D. $41,000

 

 

22.During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers’ wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit.What is the amount of gross margin for the first year?   

A. $15,000

 

B. $24,000

 

C. $20,000

 

D. $45,000

 

 

23.During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers’ wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit.What is the amount of finished goods inventory on the balance sheet at year-end?   

A. $10,000

 

B. $20,000

 

C. $4,000

 

D. $15,000

 

 

24.During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers’ wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit.What was Silverman’s net income for the first year in operation?   

A. $7,000

 

B. $12,000

 

C. $28,000

 

D. $37,000

 

 

25.Manufacturing costs that cannot be traced to specific units of product in a cost-effective manner are:   

A. depreciation on production equipment.

 

B. direct material.

 

C. indirect labor.

 

D. Both depreciation on production equipment and indirect labor.

 

 

26.What is the effect on the balance sheet of recording a $200 cash purchase of raw materials?   

A. Assets decrease by $200 and equity decreases by $200.

 

B. Assets and equity do not change.

 

C. Assets increase by $200 and equity increases by $200.

 

D. Assets increase by $200 and equity does not change.

 

 

27.What is the effect on the balance sheet of making cash sales of inventory to customers on profit?   

A. Assets and equity increase.

 

B. Assets and equity decrease.

 

C. Assets decrease and equity increases.

 

D. Assets increase and equity decreases.

 

 

28.Which of the following types of labor costs will never flow through the balance sheet?   

A. Plant supervision

 

B. Sales commissions

 

C. Material handling

 

D. Assembly labor

 

 

29.Which of the following is not classified as manufacturing overhead?   

A. Product delivery costs

 

B. Supervisory labor

 

C. Factory insurance

 

D. Production supplies

 

 

30.Kirsten believes her company’s overhead costs are driven (affected) by the number of direct labor hours because the production process is very labor intensive. During the period, the company produced 5,000 units of Product A requiring a total of 1,600 labor hours and 2,500 units of Product B requiring a total of 400 labor hours. What allocation rate should be used if the company incurs overhead costs of $20,000?   

A. $10 per labor hour

 

B. $2.67 per unit

 

C. $12.50 per labor hour for Product A and $50 per labor hour for Product B

 

D. None of these.