Accounting 2020 Test 1

Canners Company uses weight-average costing. Begining WIP had $3,650 of materials costs. During the period, $5,000 of materials and $9,250 in conversion costs were added. If there are 250 EU of production for material, the cost per equivalent unit for materials is :

($3,652 + $5,000)/250 = $34.60

The total job costs include

Direct Labor Direct materials Applied MOH

Widely used allocation bases in manufacturing are:

Units of production Direct Labor hours Machine Hours Direct labor cost

Martinez Company's relevant range of production is 9,500 units to 14,500 units. When it produces and sells 12,000 units, its unit costs are as follows: Direct materials $ 6.20 Direct labor $ 3.70 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.20 Fixed selling expense $ 3.20 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45 If 10,000 units are produced, what is the average fixed manufacturing cost per unit produced? (Round your answer to 2 decimal places.)

4.2*12,000 units/ 10,000 units =5.04

Direct materials $ 6.20 Direct labor $ 3.70 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.20 Fixed selling expense $ 3.20 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45 If 10,000 units are sold, what is the variable cost per unit sold?

6.2+3.7+1.6+1.2+0.45=13.15

Martinez Company's relevant range of production is 9,500 units to 14,500 units. When it produces and sells 12,000 units, its unit costs are as follows: Direct materials $ 6.20 Direct labor $ 3.70 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.20 Fixed selling expense $ 3.20 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45 What total incremental cost will Martinez incur if it increases production from 12,000 to 12,001 units?

6.2+3.7+1.6=11.50

Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed. Cost of Goods sold __________ Advertising expense __________ Shipping expense __________ Salaries and commissions __________ Insurance expense __________ Depreciation expense __________

Cost of Goods sold __Variable__ Advertising expense __Fixed__ Shipping expense __Mixed___ Salaries and commissions __Mixed___ Insurance expense __Fixed__ Depreciation expense __Fixed__

Discretionary fixed costs

Fixed costs usually arise from annual spending decisions by management

With _________ costing , it makes no sense to try and identify materials, labor and overhead costs with a particular order.

Process

Direct materials $ 6.20 Direct labor $ 3.70 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.20 Fixed selling expense $ 3.20 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45 For financial accounting purposes, what is the total amount of product costs incurred to make 12,000 units?

Product cost = Direct material + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead = 12,000 x $(6.2 + 3.7 + 1.6 + 4.2) = 12,000 x $15.7 = $188,400

Smith Inc. uses a job-order costing system with the predetermined overhead rate of $12 per machine-hour. The job cost sheet for Job #42A listed $12,000 in direct labor cost, $18,000 in direct materials cost, 1,200 direct labr hours and 1,100 machine-hours. The total cost of #42A is _________

Total cost of Job #42A = Direct materials + Direct Labor + (Predetermined overhead rate * actual machine-hours) $18,000 + $12,000 + ($12 *$1,100) =$43,200

Month Occupancy- Days Electrical Costs January 3,560 $ 6,573 February 3,420 $ 6,209 March 4,120 $ 7,022 April 1,990 $ 5,174 May 430 $ 1,118 June 1,750 $ 4,550 July 3,690 $ 6,687 August 3,970 $ 6,968 September 1,950 $ 5,070 October 1,450 $ 3,770 November 2,050 $ 5,330 December 2,300 $ 5,980 occupancy day electrical cost High activity level : _______________ _______________ Low activity level : _______________ _______________ Variable cost __________ per occupancy-day Fixed cost element ____________

occupancy day electrical cost High activity level : ____4,120_____ ____7,022_____ Low activity level : ____430______ ____1,118_____ Variable cost __1.60__ per occupancy-day Fixed cost element __430_____