1. Tool Time Inc. uses job order costing for its brand new line of homework machines. The cost incurred for production during 2010 totaled $6,000 of materials, $3,000 of direct labor costs, and $2,000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of the year. Beginning work in process totaled $5,000, and the ending balance is $3,000. During the year, the company completed 40 machines. How much is the cost per machine?
a $225
b $325
c $275
d $400
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2. Order Online views machine hours as the best activity base for its manufacturing overhead. The estimate of overhead costs for the year for its jobs was $205,000. The company used 1,000 hours of processing on its job B12 during the period and incurred overhead costs totaling $210,000. The budgeted machine hours for the year totaled 20,000. How much overhead should be applied to job B12?
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a $210
b $10,250
c $10,500
d $205 |
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3. Cost of goods manufactured equals $44,000 for 2010. Finished goods inventory is $2,000 at the beginning of the year and $5,500 at the end of the year. Beginning and ending work in process for 2010 are $4,000 and $5,000 respectively. How much is cost of goods sold for the year?
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a $46,500
b $42,000
c $40,500
d $47,500 |
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4. During 2010, Caruba Manufacturing expected Job 51 to cost $300,000 of overhead, $500,000 of material, and $200,000 in labor. Caruba applies overhead based on 150% of direct labor cost. Actual production required the following material and labor: $550,000 in materials was used, and $220,000 in labor was used. All of the goods were completed. What amount was transferred to Finished Goods?
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a $1,070,000
b $1,100,000
c $1,000,000
d $1,050,000 |
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5. Tra Corporation is analyzing its account balances for 2010. As of the end of 2010, a debit balance of $4,000 remains in the manufacturing overhead account. What impact will this have on the financial statements?
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a It will increase assets by $4,000 and have no effect on income.
b It will increase income by $4,000.
c It will reduce income by $4,000.
d It will decrease gross profit but will have no effect on income. |
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6. Cal, Inc. showed the following amounts in its manufacturing overhead account at the end of 2010:
| MANUFACTURING |
OVERHEAD |
| Debits |
Credits |
| 20,000 |
|
| 16,000 |
55,000 |
| 22,000 |
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Based on this information, which statement is true?
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a No manufacturing overhead has been applied.
b Manufacturing overhead expense will be reported in the operating section of the income statement in the amount of $3,000.
c Manufacturing overhead has been overapplied.
d Manufacturing overhead has been underapplied. |
7. Zargus Company uses process costing. The company began the month of June with 650 units in beginning work in process. 11,400 units were started into production during June. At the end of June 500 units were in ending work in process, was 30% complete. How many units were transferred out during June?
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a 11,550
b 12,050
c 11,900
d 11,250 |
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8. Schiller Company has unit costs of $5 for materials and $15 for conversion costs. There are 4,200 units in ending work in process which are 25% complete as to conversion costs, and fully complete as to materials cost. How much is the total cost assignable to the ending work in process inventory if the weighted average method is used?
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a $84,000
b $36,750
c $21,000
d $15,750 |
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9. Cinder Company had the following department information for the month:
Total materials cost . . . .. . . . . . . . . $80,000
Equivalent units of materials . . . . . . . 10,000
Total conversion costs . . . . . . . . . . . $120,000
Equivalent units of conversion costs. . . 20,000
How much is the total manufacturing cost per unit?
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a $14.00
b $6.67
c $6.00
d $8.00 |
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10. Physical units are 40,000. Total conversion costs are $197,500. There are 1,000 units in ending inventory which are 50% complete as to conversion costs. How much are conversion costs per unit if the weighted average method is used?
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a $9.88
b $5.00
c $4.93
d $4.82