Cost Terms \/ Inventory Flow \/ Overhead Allocation quiz<\/p>\n
Question 1<\/p>\n
The following costs were incurred by a manufacturing company during their latest fiscal year:
\n1. State Income Taxes
\n2. Insurance on the manufacturing facility
\n3. Supplies used in manufacturing
\n4. Wages for employees in the assembly department (i.e. part of the production process)
\n5. Wages for employees who drive the company’s customer delivery trucks
\n6. Interest on notes payable
\n7. Raw materials used in the production process
\n8. Rent for the sales outlet in Sacramento
\n9. Electricity for all manufacturing equipment
\n10. Depreciation expense on the customer delivery trucks
\n11. Wages for the sales staff
\n12. Factory supervisor’s salaries
\n13. Company president’s salary
\n14. Advertising Expense
\n15. Phone & Internet expense for the Marketing Department
\n16. Office supplies used in the Raw Materials Purchasing Department
\nFrom the 16 costs just listed, which grouping reflects all the indirect product costs incurred by the company?
\nGroup of answer choices<\/p>\n
a) Insurance on mfg facility, electricity for mfg equipment, depreciation on customer delivery trucks, & office supplies used in raw mat’ls purchasing dep’t<\/p>\n
b) Wages for employees in assembly, wages for employees who drive company’s customer delivery trucks, wages for the sales staff, & factory supervisory salaries<\/p>\n
c) Insurance on the mfg facility, supplies used in manufacturing, electricity for all mfg equipment, factory supervisors salaries, & office supplies used in the raw mat’s purchasing deparment<\/p>\n
d) Wages for employees in assembly, wages for employees who drive company’s customer delivery trucks, raw materials used in the production process, & depreciation expense on the customer delivery trucks.<\/p>\n
e) interest on notes payable, rent for sales outlet in Sacramento, wages for the sales staff, advertising expense, & phone & internet expense for the marketing department<\/p>\n
f) Supplies used in manufacturing, wages for employees who drive the company’s customer delivery trucks, & depreciation expense on the customer delivery trucks<\/p>\n
g) None of the above<\/p>\n
Question 2
\nAcme Manufacturing had the following data for the fiscal year ending December 31st.
\nRaw Materials Inventory, January 1st\t$30,000
\nRaw Material Purchases\t350,000
\nRaw Materials issued to production\t345,000
\nFixed factory overhead\t480,000
\nTotal factory overhead\t560,000
\nTotal Manufacturing Costs\t1,085,000
\nWork in process inventory, January 1st\t42,000
\nWork in process inventory, December 31st\t45,000
\nFinished Goods Inventory, January 1st\t36,000
\nGoods available for sale\t1,076,000
\nCost of Goods Sold\t1,043,000
\nBased on the financial data above, what is the:
\n\u2022\tRaw Materials Inventory on December 31st,
\n\u2022\tFinished Goods Inventory on December 31st,
\n\u2022\tDirect Labor for the year,
\n\u2022\tVariable factory overhead costs for the year, and the
\n\u2022\tCost of goods manufactured fore the year.
\nGroup of answer choices<\/p>\n
a) $25,000, $42,000, $525,000, $525,000, $1,076,000<\/p>\n
b) $5,000, $9,000, $80,000, $135,000, $1,043,000<\/p>\n
c) $380,000, $78,000, $740,000, $80,000, $1,040,000<\/p>\n
d) $35,000 $33,000, $180,000, $80,000, $1,040,000<\/p>\n
e) $35,000, $33,000, $180,000, $45,000, $1,085,000<\/p>\n
f) None of the above<\/p>\n
Question 3
\nLa Patisserie is a small bakery that provides cakes and breads to small grocery shops in the town of Soquel, California. It is housed in a single building. The ovens and mixing areas occupy 65% of the space, 5% is used for storing and mailing marketing literature and the rest is occupied by the office staff. The bakery operates 360 days per year, 8 hours per day. It employs two cake bakers who are paid $22 per hour and two bread bakers who are paid $12 per hour and has a small staff of helpers who account for 30% of the other employee salaries. Approximately 60% of its materials, flour, eggs, sugar and oil, are used for cakes; the remaining 40% are used for bread. Indirect manufacturing costs are allocated to products on the basis of direct labor hours. During the current year, it started and completed 108,000 cakes and 144,000 loaves of bread at a selling price of $6 per unit and $1.50 per unit respectively.<\/p>\n
Annual costs incurred by La Patisserie:
\nFlour, Eggs, Sugar and Oil\t$140,300
\nOffice staff salaries\t$89,500
\nRent utilities and insurance\t$124,700
\nBaker’s wages\t$214,000
\nSalaries of other employees\t$106,000
\nSales commissions (5%)\t$50,000
\nDelivery cost to customers\t$4,500
\nOther baking materials & supplies\t$23,900
\nOffice equipment & supplies\t$15,250
\nTotal cost\t$768,150<\/p>\n
What is the total manufacturing overhead for this period?
\nGroup of answer choices<\/p>\n
a) $350,755<\/p>\n
b) $136,755<\/p>\n
c) $112,855<\/p>\n
d) $186,755<\/p>\n
e) $130.210<\/p>\n
f) None of the above<\/p>\n
Question 4<\/p>\n
Which of the following statements regarding freight costs is correct?
\nGroup of answer choices<\/p>\n
a) Freight costs incurred on raw material purchases, transfers of inventory between production facilities, and delivery of products sold to customer are all classified as period costs.<\/p>\n
b) Freight costs incurred on raw material purchases are classified as product costs and included in the cost of raw materials. Freight costs incurred on transfers of inventory between production facilities and delivery of products sold to customers are classified as period costs.<\/p>\n
c) Freight costs incurred on raw material purchases and delivery of products sold to customers are classified as period costs. Freight costs incurred on transfers of inventory between production facilities are classified as manufacturing overhead and are treated as product costs.<\/p>\n
d) Freight costs incurred on raw material purchases are classified as product costs and included in the cost of raw materials. Freight costs incurred on delivery of products sold to customers are classified as period costs. Freight costs incurred on transfers of inventory between production facilities are classified as product costs and included manufacturing overhead.<\/p>\n
e) None of the above.<\/p>\n
Question 5
\nWhen production levels are expected to increase within a relevant range, what effects would be anticipated with respect to each of the following?
\nFixed Costs (per Unit)\tVariable Costs (per Unit)
\n(A)\tincrease\tno change
\n(B)\tdecrease\tincrease
\n(C)\tdecrease\tno change
\n(D)\tno change\tincrease
\n(E)\tno change\tno change
\n(F)\tincrease\tincrease
\nGroup of answer choices<\/p>\n
A Above.<\/p>\n
B Above.<\/p>\n
C Above.<\/p>\n
D Above.<\/p>\n
E) Above<\/p>\n
F) Above<\/p>\n
Question 6
\nThe Gym Company produces weights in different sizes and sells them to gym equipment distribution companies who in turn sell them to various gyms such as Boston Sports Club or Gold’s Gym. The manufacturing plant occupies 75% of the total buildings and grounds. Approximately 80% of the utilities are for the manufacturing plant. External vendors provide all of the materials and supplies. The sales force is paid entirely on commissions. Advertising spending is set by contract at beginning of the year. At full capacity, the plant is capable of producing 500,000 units per year, but 2006 production volumes are below this maximum capacity level. Total 2006 Product Cost per unit was $3.10, $0.60 of which was variable. Information on their 2006 costs and related inventory balances are listed in the table below.
\nItem\t1-Jan-2006\t31-Dec-2006\tDuring the Year
\nRaw materials inventory\t$60,000\t$20,000
\nWork-in-process inventory\t72,000\t88,000
\nFinished goods inventory\t40,000\t50,000
\nTotal manufacturing costs\t \t \t$1,310,250
\nGoods available for sale\t \t \t1,334,250
\nCost of goods sold\t \t \t1,284,250
\nPurchases of raw materials\t\t \t 164,500
\nMarketing salaries\t\t \t236,500
\nNon factory administrative salaries\t\t \t235,000
\nFactory maintenance staff salaries\t\t \t154,000
\nDirect labor\t\t \t???
\nBuilding rental\t\t \t250,000
\nAdvertising\t\t \t148,000
\nUtilities (Electricity, water, phone…)\t\t \t120,000
\nIndirect labor\t\t \t110,000
\nSales commissions (5% of sales)\t\t \t98,400
\nFactory equipment depreciation\t\t \t 490,250
\nWhat is the Cost of Goods Manufactured for 2006?
\nGroup of answer choices<\/p>\n
a) $1,310,250<\/p>\n
b) $1,284,250<\/p>\n
c) $1,334,250<\/p>\n
d) $1,294,250<\/p>\n
e) $1,326,250<\/p>\n
f) None of the above<\/p>\n
Question 7
\nThis question uses the same financial data as Question 6, but it is a separate question.
\nThe Gym Company produces weights in different sizes and sells them to gym equipment distribution companies who in turn sell them to various gyms such as Boston Sports Club or Gold’s Gym. The manufacturing plant occupies 75% of the total buildings and grounds. Approximately 80% of the utilities are for the manufacturing plant. External vendors provide all of the materials and supplies. The sales force is paid entirely on commissions. Advertising spending is set by contract at beginning of the year. At full capacity, the plant is capable of producing 500,000 units per year, but 2006 production volumes are below this maximum capacity level. Total 2006 Product Cost per unit was $3.10, $0.60 of which was variable. Information on their 2006 costs and related inventory balances are listed in the table below.
\nItem\t1-Jan-2006\t31-Dec-2006\tDuring the Year
\nRaw materials inventory\t$60,000\t$20,000
\nWork-in-process inventory\t72,000\t88,000
\nFinished goods inventory\t40,000\t50,000
\nTotal manufacturing costs\t \t \t$1,310,250
\nGoods available for sale\t \t \t1,334,250
\nCost of goods sold\t \t \t1,284,250
\nPurchases of raw materials\t\t \t164,500
\nMarketing salaries\t\t \t236,500
\nNon factory administrative salaries\t\t \t235,000
\nFactory maintenance staff salaries\t\t \t154,000
\nDirect labor\t\t \t???
\nBuilding rental\t\t \t250,000
\nAdvertising\t\t \t148,000
\nUtilities (Electricity, water, phone…)\t\t \t120,000
\nIndirect labor\t\t \t110,000
\nSales commissions (5% of sales)\t\t \t98,400
\nFactory equipment depreciation\t\t \t490,250
\nWhat were total units manufactured and the total fixed manufacturing cost incurred in 2006?
\nGroup of answer choices<\/p>\n
a) 422,661 & $1,025,250<\/p>\n
b) 414,274 & $870,688<\/p>\n
c) 430,403 & $1,044,250<\/p>\n
d) 427,823 & $902,688<\/p>\n
e) 417,500 & $1,043,750<\/p>\n
f) None of the above<\/p>\n
Question 8
\nThis question uses the same financial data as Questions 6 & 7, but it is a separate question.
\nThe Gym Company produces weights in different sizes and sells them to gym equipment distribution companies who in turn sell them to various gyms such as Boston Sports Club or Gold’s Gym. The manufacturing plant occupies 75% of the total buildings and grounds. Approximately 80% of the utilities are for the manufacturing plant. External vendors provide all of the materials and supplies. The sales force is paid entirely on commissions. Advertising spending is set by contract at beginning of the year. At full capacity, the plant is capable of producing 500,000 units per year, but 2006 production volumes are below this maximum capacity level. Total 2006 Product Cost per unit was $3.10, $0.60 of which was variable. Information on their 2006 costs and related inventory balances are listed in the table below.
\nItem\t1-Jan-2006\t31-Dec-2006\tDuring the Year
\nRaw materials inventory\t$60,000\t$20,000
\nWork-in-process inventory\t72,000\t88,000
\nFinished goods inventory\t40,000\t50,000
\nTotal manufacturing costs\t \t \t$1,310,250
\nGoods available for sale\t \t \t1,334,250
\nCost of goods sold\t \t \t1,284,250
\nPurchases of raw materials\t\t \t164,500
\nMarketing salaries\t\t \t236,500
\nNon factory administrative salaries\t\t \t235,000
\nFactory maintenance staff salaries\t\t \t154,000
\nDirect labor\t\t \t???
\nBuilding rental\t\t \t250,000
\nAdvertising\t\t \t148,000
\nUtilities (Electricity, water, phone…)\t\t \t120,000
\nIndirect labor\t\t \t110,000
\nSales commissions (5% of sales)\t\t \t98,400
\nFactory equipment depreciation\t\t \t490,250
\nThe company anticipates 2007 production volumes to increase by 10% over 2006.
\nIf total fixed costs and the variable product cost per unit in 2006 remain the same in 2007, what are the anticipated total manufacturing costs to be incurred and the anticipated total unit production volume in 2007?
\nGroup of answer choices<\/p>\n
a) $1,319,300 & 459,250<\/p>\n
b) $1,325,300 & 469,250<\/p>\n
c) $1,294,750 & 417,500<\/p>\n
d) $1,276,350,& 418,500<\/p>\n
e) $1,319,600 & 459,750<\/p>\n
f) None of the above<\/p>\n
Question 9
\nWhy are predetermined factory overhead rates used to apply factory overhead to units of production instead of actual overhead costs?
\nGroup of answer choices<\/p>\n
a) Predetermine factory overhead rates can be applied on a more-timely basis than actual overhead rates, permitting product cost and profitability to be reported and analyzed within days or even hours after each month-end.<\/p>\n
b) Actual overhead and actual production volumes can vary by month due seasonal changes in certain factory overhead costs, and production scheduling. Thus, applying these fluctuating costs to short term changes in production volumes would distort product costs during periods when these fluctuations took place.<\/p>\n
c) Actual factory overhead is easier to accumulate and apply. Predetermined factory overhead is more methodical, which results in a more accurate set of product costs.<\/p>\n
d) Predetermined factory overhead rates are more accurate than actual overhead rates and therefore are the preferred technique for applying to units of production.<\/p>\n
e) All of the above<\/p>\n
f) A & B only<\/p>\n
g) C & D only<\/p>\n
h) A & D only<\/p>\n
i) B & C only<\/p>\n
Question 10<\/p>\n
Lucy Sportswear (LS) manufactures specialty t-shirts. LS uses a job-order cost system to cost t-shirts.
\nDuring August, LS manufactured Job # 2022-X200, an order requesting 5,000 t-shirts. The following costs were incurred: Actual Cotton and thread: $14,000. Actual Direct Labor: $4,500, at a rate of $15.00 per hour. Manufacturing Overhead was applied at a rate of $20.00 per Direct Labor hour incurred. Actual automated sewing machine hours incurred for the job was 600. 5,000 t-shirts were manufactured. Actual administrative costs for August were $20,000. Actual marketing costs for August were $15,000. Actual Manufacturing Overhead for August was $3,000.
\nWhat was total product cost per t-shirt for Job 2022-X200 using normal costing?
\nGroup of answer choices<\/p>\n
a) $7.70<\/p>\n
b) $10.10<\/p>\n
c) $4.90<\/p>\n
d) 4.30<\/p>\n
e) $21.70<\/p>\n
f) None of the above<\/p>\n","protected":false},"excerpt":{"rendered":"
Cost Terms \/ Inventory Flow \/ Overhead Allocation quiz Question 1 The following costs were incurred by a manufacturing company during their latest fiscal year:\u2026<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9079,8186],"tags":[],"class_list":["post-111048","post","type-post","status-publish","format-standard","hentry","category-essay-written-assessment","category-accounting-homework-help"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/111048","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=111048"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/111048\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=111048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=111048"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=111048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}