ACCT Cost Exam 1 complete solutions correct answers key

Liberty University ACCT Cost Exam 1 complete solutions correct answers key

Many different versions

1.

award:
3 out of
3.00 points

Babuca Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product.

  Production volume

15,300

 units

17,000

 units

  Direct materials

$931,770

$1,035,300

  Direct labor

$344,250

$382,500

  Manufacturing overhead

$1,011,500

$1,036,150

The best estimate of the total cost to manufacture 16,500 units is closest to: (Do not round intermediate calculations.)

2.

award:
3 out of
3.00 points

The following cost data pertain to the operations of Swestka Department Stores, Inc., for the month of July.

  Corporate headquarters building lease

$87,100  

  Cosmetics Department sales commissions--Northridge Store

$5,870  

  Corporate legal office salaries

$63,700  

  Store manager's salary-Northridge Store

$14,900  

  Heating-Northridge Store

$12,800  

  Cosmetics Department cost of sales--Northridge Store

$38,800  

  Central warehouse lease cost

$14,100  

  Store security-Northridge Store

$19,700  

  Cosmetics Department manager's salary--Northridge Store

$4,970  

The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores.

What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?

3.

award:
3 out of
3.00 points

Management of Modugno Corporation is considering whether to purchase a new model 370 machine costing $534,000 or a new model 240 machine costing $422,000 to replace a machine that was purchased 5 years ago for $473,000. The old machine was used to make product M25A until it broke down last week. Unfortunately, the old machine cannot be repaired.

Management has decided to buy the new model 240 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product M25A.

Management also considered, but rejected, the alternative of simply dropping product M25A. If that were done, instead of investing $422,000 in the new machine, the money could be invested in a project that would return a total of $469,000.

In making the decision to invest in the model 240 machine, the opportunity cost was:

4.

award:
3 out of
3.00 points

At a sales volume of 40,000 units, Thoma Corporation's sales commissions (a cost that is variable with respect to sales volume) total $492,000.

To the nearest whole dollar, what should be the total sales commissions at a sales volume of 39,100 units? (Assume that this sales volume is within the relevant range.) (Do not round intermediate calculations.)

5.

award:
3 out of
3.00 points

Buckeye Company has provided the following data for maintenance cost:

Prior Year

Current Year

  Machine hours

19,200       

21,450       

  Maintenance cost

$32,200       

$35,575       

The best estimate of the cost formula for maintenance would be: (Do not round intermediate calculations. Round your Variable cost per unit to 2 decimal places.)

6.

award:
3 out of
3.00 points

Salvadore Inc., a local retailer, has provided the following data for the month of September:

  Merchandise inventory, beginning balance

$  46,800  

  Merchandise inventory, ending balance

$  45,000  

  Sales

$265,200  

  Purchases of merchandise inventory

$133,100  

  Selling expense

$  24,900  

  Administrative expense

$  54,700  

The net operating income for September was:

7.

award:
3 out of
3.00 points

The following costs were incurred in September:

  Direct materials

$42,900   

  Direct labor

$29,500   

  Manufacturing overhead

$30,500   

  Selling expenses

$21,700   

  Administrative expenses

$35,800   

Conversion costs during the month totaled:

8.

award:
3 out of
3.00 points

At a sales volume of 32,500 units, Thoma Corporation's sales commissions (a cost that is variable with respect to sales volume) total $526,500.

To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 47,600 units? (Assume that this sales volume is within the relevant range.)

9.

award:
3 out of
3.00 points

Nikkel Corporation, a merchandising company, reported the following results for July:

  Sales

$406,000   

  Cost of goods sold (all variable)

$175,800   

  Total variable selling expense

$  25,200   

  Total fixed selling expense

$  16,100   

  Total variable administrative expense

$  12,700   

  Total fixed administrative expense

$  33,000   

The contribution margin for July is:

10.

award:
3 out of
3.00 points

Babuca Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product.

  Production volume

13,700

 units

15,000

 units

  Direct materials

$911,050

$997,500

  Direct labor

$239,750

$262,500

  Manufacturing overhead

$1,008,400

$1,025,820

The best estimate of the total monthly fixed manufacturing cost is: (Do not round intermediate calculations.)

11.

award:
4 out of
4.00 points

Hults Corporation has provided data concerning the company's Manufacturing Overhead account for the month of November. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $68,800 and the total of the credits to the account was $60,800. Which of the following statements is true?

12.

award:
4 out of
4.00 points

Bakker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $73,140 and 2,300 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $75,290 and actual direct labor-hours were 2,200.

The overhead for the year was: (Round your intermediate calculations to 2 decimal places.)

13.

award:
4 out of
4.00 points

Job 731 was recently completed. The following data have been recorded on its job cost sheet:
  

  Direct materials

$2,429  

  Direct labor-hours

71  

 labor-hours

  Direct labor wage rate

$    20  

 per labor-hour

  Machine-hours

134  

 machine-hours

The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $21 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 731 would be:

14.

award:
4 out of
4.00 points

Lyster Inc. has provided the following data for the month of August. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.

Work in
Process

Finished
Goods

Cost of Goods Sold

Total

  Direct materials

$2,680  

$17,180  

$44,160  

$64,020  

  Direct labor

2,610  

16,580  

42,350  

61,540  

  Manufacturing overhead applied

1,652  

10,080  

29,568  

41,300  

  Total

$6,942  

$43,840  

$116,078  

$166,860  

Manufacturing overhead for the month was underapplied by $1,800.
The company allocates under applied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The work in process inventory at the end of August after allocation of under applied manufacturing overhead for the month is:

15.

award:
4 out of
4.00 points

The Donaldson Company uses a job-order costing system. The following data were recorded for July:
   

July 1

Work in Process

Added During July

Job Number

Inventory

Direct
Materials

Direct
Labor

475

$1,750    

$720    

$388    

476

$1,720    

$980    

$1,610    

477

$1,600    

$1,600    

$2,290    

478

$1,170    

$1,470    

$2,400    

Overhead is applied to jobs at the rate of 70% of direct materials cost. Jobs 475, 477, and 478 were completed during July and transferred to finished goods. Jobs 475 and 478 have been delivered to the customer. Donaldson's Work in Process inventory balance on July 31 was:

16.

award:
4 out of
4.00 points

Snappy Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Manufacturing overhead cost and direct labor hours were estimated at $105,000 and 50,000 hours, respectively, for the year. In July, Job #334 was completed at a cost of $5,770 in direct materials and $1,800 in direct labor. The labor rate is $6 per hour. By the end of the year, Snappy had worked a total of 54,000 direct labor-hours and had incurred $110,370 actual manufacturing overhead cost.

If Job #334 contained 200 units, the unit product cost on the completed job cost sheet would be: (Round intermediate calculations to 2 decimal places.)

17.

award:
4 out of
4.00 points

During October, Crusan Corporation incurred $65,500 of direct labor costs and $5,100 of indirect labor costs. The journal entry to record the accrual of these wages would include a:

18.

award:
4 out of
4.00 points

Snappy Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Manufacturing overhead cost and direct labor hours were estimated at $72,000 and 30,000 hours, respectively, for the year. In July, Job #334 was completed at a cost of $1,580 in direct materials and $1,800 in direct labor. The labor rate is $6 per hour. By the end of the year, Snappy had worked a total of 34,000 direct labor-hours and had incurred $80,540 actual manufacturing overhead cost.

Snappy's manufacturing overhead for the year was: (Round intermediate calculations to 2 decimal places.)

19.

award:
4 out of
4.00 points

Jurper Corporation used $222,000 of direct materials during April. At the end of April, Jurper's direct materials inventory was $25,200 more than it was at the beginning of the month. Direct materials purchases during the April amounted to:

20.

award:
4 out of
4.00 points

During September, Stutzman Corporation incurred $84,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $80,000.

The journal entry to record the application of Manufacturing Overhead to Work in Process would include a:

21.

award:
3 out of
3.00 points

Chae Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 750 units. The costs and percentage completion of these units in beginning inventory were:

Cost

Percent Complete

  Materials costs

$8,400      

65%            

  Conversion costs

$7,400      

20%            

A total of 8,600 units were started and 7,850 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

  Materials costs

$138,400  

  Conversion costs

$324,400  

The ending inventory was 80% complete with respect to materials and 65% complete with respect to conversion costs.

What are the equivalent units for conversion costs for the month in the first processing department?

22.

award:
3 out of
3.00 points

Ravalt Corporation uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's operations in January.

Units

Percent Complete with Respect to Conversion

  Beginning work in process inventory

3,400  

81%

  Transferred in from the prior department during   January

57,300  

  Completed and transferred to the next   department during January

56,300  

  Ending work in process inventory

4,400  

88%

The Molding Department's cost per equivalent unit for conversion cost for January was $8.55. How much conversion cost was assigned to the ending work in process inventory in the Molding Department for January?

23.

award:
3 out of
3.00 points

Jumper Company uses the weighted-average method in its process costing system. The following data pertain to operations in the first processing department for a recent month:

  Work in process, beginning:

  Units in process

500     

  Percent complete with respect to materials

65%  

  Percent complete with respect to conversion

25%  

  Costs in the beginning inventory:

  Materials cost

$1,700     

  Conversion cost

$3,200     

  Units started into production during the month

14,800     

  Units completed and transferred out during the month

13,600     

  Costs added to production during the month:

  Materials cost

$84,082     

  Conversion cost

$38,424     

  Work in process, ending:

  Units in process

?     

  Percent complete with respect to materials

70%  

  Percent complete with respect to conversion

30%  

What was the cost per equivalent unit for conversion cost?

24.

award:
3 out of
3.00 points

The following information pertains to Yap Company's Grinding Department for the month of April:

Units

Materials Costs

  Beginning work in process

25,000       

$20,500      

  Started in April

46,500       

$31,000      

  Units completed and transferred out

47,500       

  Ending work in process

24,000       

All materials are added at the beginning of the process. Using the weighted-average method, the cost per equivalent unit for materials is closest to:

25.

award:
3 out of
3.00 points

Scheney Company uses the weighted-average method in its process costing system. The company's work in process inventory on March 31 consisted of 23,000 units. The units in the ending work in process inventory were 100% complete with respect to materials and 80% complete with respect to labor and overhead. If the cost per equivalent unit for March was $2.70 for materials and $4.75 for labor and overhead, the total cost in the March 31 work in process inventory was:

26.

award:
3 out of
3.00 points

Chae Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 700 units. The costs and percentage completion of these units in beginning inventory were:

Cost

Percent Complete

  Materials costs

$7,900      

60%            

  Conversion costs

$6,900      

30%            

A total of 8,100 units were started and 7,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

  Materials costs

$137,900  

  Conversion costs

$323,900  

The ending inventory was 80% complete with respect to materials and 75% complete with respect to conversion costs.

The cost per equivalent unit for materials for the month in the first processing department is closest to:

27.

award:
3 out of
3.00 points

The Gasson Company uses the weighted-average method in its process costing system. The company's ending work in process inventory consists of 16,000 units, 100% complete with respect to materials and 80% complete with respect to labor and overhead. If the costs per equivalent unit are $3.20 for the materials and $2.30 for labor and overhead, the balance of the ending work in process inventory account would be:

 28.

award:
3 out of
3.00 points

In February, one of the processing departments at Whisenhunt Corporation had beginning work in process inventory of $42,000 and ending work in process inventory of $18,000. During the month, the cost of units transferred out from the department was $476,000. In the department's cost reconciliation report for February, the total cost to be accounted for would be:

29.

award:
3 out of
3.00 points

Borwan Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 7,200 units in its beginning work in process inventory that were 80% complete with respect to conversion costs. An additional 82,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 4,200 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?

30.

award:
3 out of
3.00 points

Chae Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 520 units. The costs and percentage completion of these units in beginning inventory were:

Cost

Percent Complete

  Materials costs

$6,100      

70%            

  Conversion costs

$5,100      

20%            

A total of 8,300 units were started and 7,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

  Materials costs

$136,100  

  Conversion costs

$322,100  

The ending inventory was 80% complete with respect to materials and 75% complete with respect to conversion costs.

How many units are in ending work in process inventory in the first processing department at the end of the month?