1. Given the following data for Rene Company, compute (A) total manufacturing costs and (B) cost of goods manufactured:
Direct materials used $120,000 Beginning work in process $20,000
Direct labor 100,000 Ending work in process 10,000
Manufacturing overhead 150,000 Beginning finished goods 25,000
Operating expenses 175,000 Ending finished goods 15,000
(A) (B)
a. $360,000 $380,000
b. $370,000 $360,000
c. $370,000 $380,000
d. $380,000 $390,000
2. Rebel Company incurs the following costs in producing 50,000 units of product:
Direct materials $150,000
Direct labor 100,000
Variable manufacturing overhead 125,000
Fixed manufacturing overhead 450,000
An outside supplier has offered to supply the 50,000 units at $10.50 each. All of Rebel's related variable costs, but only $300,000 of the fixed costs would be eliminated if the offer is accepted. Acceptance will result in a
a. savings of $300,000.
b. loss of $150,000.
c. savings of $150,000.
d. loss of $300,000.
3. Finish Company has a production process where two products result from a joint processing procedure; both can be sold immediately or processed further. Given the following additional per unit information, determine which of the products should be processed further.
Allocated Additional New
Product Joint Cost Selling Price Processing Cost Selling Price
A $100 $200 $180 $400
B 60 100 50 160
a. A
b. B
c. Both
d. Neither
4. Wild West Inc. produces a product requiring 3 direct labor hours at $20.00 per hour. During January, 2,000 products are produced using 6,300 direct labor hours. Wild West's actual payroll during January was $122,850. What is the labor quantity variance?
a. $2,850 U
b. $6,000 F
c. $3,150 F
d. $6,000 U
5. In which of the following categories do indirect materials belong?
|
Product
Cost
|
Manufacturing
Overhead
|
Period
Cost
|
a. No No Yes
b. Yes No No
c. Yes Yes No
d. Yes Yes Yes
6. Guerry Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or over application of overhead for the period:
Estimated annual overhead cost $600,000
Actual annual overhead cost $575,000
Estimated machine hours 150,000
Actual machine hours 140,000
a. $560,000 applied and $15,000 under-applied
b. $600,000 applied and $15,000 over-applied
c. $560,000 applied and $15,000 over-applied
d. $575,000 applied and neither under- nor over-applied
7. The production cost report shows both quantities and costs. Costs are reported in three sections: (1) costs accounted for, (2) unit costs, and (3) costs to be accounted for. The sections are listed in the following order:
a. (1), (2), (3).
b. (1), (3), (2).
c. (2), (1), (3).
d. (2), (3), (1).
8. Wasp, Inc. produced 200 items and had the following costs: Hourly labor, $5,000, depreciation, $2,000; materials, $2,000; and rent, $3,000. How much is the variable cost per unit?
a. $60
b. $50
c. $25
d. $35
9. Carrot Takers, Inc. provided the following results:
|
|
2004
|
2003
|
|
Units
|
2,400
|
3,000
|
|
Total Cost
|
$19,200
|
$24,000
|
What form of cost behavior is the cost above?
a. Fixed Cost
b. Sunk Cost
c. Mixed Cost
d. Variable Cost
10. In cost-plus pricing, the target selling price is computed as
a. variable cost per unit + desired ROI per unit.
b. fixed cost per unit + desired ROI per unit.
c. total unit cost + desired ROI per unit.
d. variable cost per unit + fixed manufacturing cost per unit + desired ROI per unit.