Cost Accounting

T/F Depreciation is always considered a period cost for external financial reporting purposes in a manufacturing company.

False

Schwiesow Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.05 Direct labor $ 3.50 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 11,000 Sales commissions $ 1.00 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 5,500 If 4,000 units are sold, the variable cost per unit sold is closest to:

$13.60

T/F The equivalent units in beginning work in process inventory plus the equivalent units in ending work in process inventory equals the units transferred out plus the equivalent units for the work done during the period.

False

Wessner Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.20 Direct labor $ 2.80 Variable manufacturing overhead $ 1.45 Fixed manufacturing overhead $ 12,000 Sales commissions $ 1.00 Variable administrative expense $ 0.55 Fixed selling and administrative expense $ 4,000 If 5,000 units are produced, the total amount of manufacturing overhead cost is closest to:

$19,250

T/F When materials are purchased in a process costing system, a work in process account is debited with the cost of the materials.

False

Carpenter Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 600 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 5,200 60% Conversion costs $ 8,500 55% A total of 7,800 units were started and 7,100 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 $ 95,000 Conversion costs $ 169,200 The ending inventory was 85% complete with respect to materials and 70% complete with respect to conversion costs. The total cost transferred from the first processing department to the next processing department during the month is closest to:

$244,319

A partial listing of costs incurred during March at Febbo Corporation appears below: Factory supplies $ 9,000 Administrative wages and salaries $ 85,000 Direct materials $ 126,000 Sales staff salaries $ 30,000 Factory depreciation $ 33,000 Corporate headquarters building rent $ 43,000 Indirect labor $ 26,000 Marketing $ 65,000 Direct labor $ 99,000 The total of the product costs listed above for March is:

$293,000

Lucas Corporation uses the weighted-average method in its process costing system. The company adds materials at the beginning of the process in the Forming Department, which is the first of two stages in its production process. Information concerning operations in the Forming Department in October follows: Units Materials Cost Work in process on October 1 6,000 $ 3,000 Units started during October 50,000 $ 25,560 Units completed and transferred to the next Department during October 44,000 What was the materials cost of work in process at October 31?

$6,120

Sumter Corporation 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 6,000 Percent complete with respect to materials 60 % Percent complete with respect to conversion 20 % Costs in the beginning inventory: Materials cost $ 78,200 Conversion cost $ 3,600 Units started during the month ? Units completed and transferred out during the month 70,000 Costs added to production during the month: Materials cost $ 286,600 Conversion cost $ 216,000 Work in process, ending: Units in process 8,000 Percent complete with respect to materials 75 % Percent complete with respect to conversion 25 % How many units were started into production during the month?

72,000 units

In the standard cost formula Y = a + bX, what does the "X" represent?

Level of Activity

T/F A factory supervisor's salary would be classified as an indirect cost with respect to a unit of product.

True

T/F A flour manufacturer is more likely to use process costing than job-order costing whereas a manufacturer of customized leather jackets is more likely to use job-order costing than process costing.

True

T/F Selling and administrative expenses are period costs under generally accepted accounting principles.

True

T/F The three cost elements ordinarily included in product costs are direct materials, direct labor, and manufacturing overhead.

True

T/F The units in beginning work in process inventory plus the units started into production must equal the units transferred out of the department plus the units in ending work in process inventory.

True

T/F Wages paid to production supervisors would be classified as manufacturing overhead.

True

Prime cost consists of:

direct labor plus direct materials