1. Gabat Inc. is a merchandising company. Last month the company’s merchandise purchases totaled $67,000. The company’s beginning merchandise inventory was $19,000 and its ending merchandise inventory was $22,000. What was the company’s cost of goods sold for the month?
A. $64,000 B. $108,000 C. $70,000 D. $67,000
2. Job 593 was recently completed. The following data have been recorded on its job cost sheet:
Direct materials $3,190
Direct labor-hours 71
Direct labor wage rate (per labor-hour) $15
Machine hours 175
The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. What amount would be the total cost recorded on the job cost sheet for Job 593?
A. $5,249 B. $4,255 C. $3,219 D. $6,705
3. Garson Corporation uses the FIFO method in its process costing system. The Grinding Department started the month with 18,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. An additional 98,000 units were transferred in from the prior department during the month to begin processing in the Grinding Department. During the month 115,000 units were completed in the Grinding Department and transferred to the next processing department. There were 1,000 units in the ending work in process inventory of the Grinding Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Grinding Department for the month?
A. 81,000 B. 115,000 C. 113,400 D. 115,200
4. Bagley Corporation has two service departments and two operating departments. The space occupied by each department can be seen in the chart below.
The fixed costs of Custodial Services are allocated on the basis of square feet. If these costs are budgeted at $38,000, what would be the amount of cost allocated to General Administration under the direct method?
A. $6,000 B. $5,700 C. $0 D. $7,125
Prior Year Current Year
Machine Hours 10,000 12,000
Maintenance Cost $24,000 $27,600
5. Oaklis Company has provided the data shown for maintenance cost. Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable components of maintenance cost are closest to what amounts?
A. $24,000 per year; $2.30 per machine hour B. $24,000 per year; $1.80 per machine hour C. $6,000 per year; $1.80 per machine hour D. $6,000 per year; $2.30 per machine hour
6. Marten Corporation uses the FIFO method in its process costing system. Operating data for the Casting Department for the month of September appear below.
According to the company’s records, the conversion cost in beginning work in process inventory was $83,600 at the beginning of September. Additional conversion costs of $427,682 were incurred in the department during the month. What is the cost per equivalent unit for conversion costs for September closest to? Round off to three decimal places.
A. $5.500 B. $5.498 C. $5.779 D. $5.620
7. Laurie Corporation uses the FIFO method in its process costing system. Department A is the first stage of Laurie Corporation’s production process. The following information is available for conversion costs for the month of May for Department A:
How many are the equivalent units of production for conversion costs for the month?
A. 42,000 units B. 44,000 units C. 36,000 units D. 38,000 units
9. A soft drink bottler incurred the following factory utility costs: $3,936 for 800 cases bottled and $3,988 for 900 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to
A. $4.66. B. $4.92. C. $4.43. D. $0.52.
10. During October, Beidleman Inc. transferred $52,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $55,000. The journal entries to record these transactions would include a
A. credit to Finished Goods of $52,000. B. debit to Finished Goods of $55,000. C. credit to Cost of Goods Sold of $55,000. D. credit to Work in Process of $52,000
12. Trapp Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in its Painting Department consisted of 3,000 units that were 70% complete with respect to materials and 60% complete with respect to conversion costs. The cost of the beginning work in process inventory in the department was recorded as $10,000. During the period, 9,000 units were completed and transferred on to the next department. The costs per equivalent unit for the period were $2.00 for material and $3.00 for conversion costs. What was the cost of units transferred out during the month?
A. $45,400 B. $39,600 C. $35,400 D. $45,000
14. There are two acceptable methods for closing out any balance of underapplied or overapplied manufacturing overhead. One method involves allocation of the balance among several accounts, whereas the other closes any balance directly to
A. Cost of Goods Manufactured.
B. Work in Process inventory. C. Finished Goods inventory. D. Cost of Goods Sold
18. Traves Corporation incurred $69,000 of actual Manufacturing Overhead costs during October. During the same period, the Manufacturing Overhead applied to Work in Process was $68,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a
A. credit to Work in Process of $69,000. B. credit to Manufacturing Overhead of $68,000. C. debit to Work in Process of $69,000. D. debit to Manufacturing Overhead of $68,000.
20. When the activity level declines within the relevant range, what should happen with respect to the fixed and variable costs per unit?
A. The variable cost per unit increases and the fixed cost per unit doesn’t change.
B. Both the fixed and variable costs per unit increase. C. The fixed cost per unit increases and the variable cost per unit doesn’t change.
D. Neither the fixed nor variable costs per unit change.
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