Accounting B: chapters 14-16

Barger Company had the following information at December 31: Finished goods inventory, JAN 1 $90,000 Finished goods inventory, DEC 31 126,000 If the cost of goods manufactured during the year amounted to $1,895,000 and annual sales were $2,994,000, how much is the amount of gross profit for the year?

$1,135,000 $90,000 + $1,895,000 - 126,000 = 1,859,000; $2,994,000 - $1,859,000 = $1,135,000

Cider Company had the following department information for the month: Total materials cost $60,000 Equivalent units of materials 10,000 Total conversion costs $90,000 Equivalent units of conversion costs 20,000 How much is the total manufacturing cost per unit?

$10.50 $60,000 / 10,000 = $6.00; $90,000 / 20,000 = $4.50; $6.00 + $4.50 = $10.50

Vektek, Inc. thinks machine hours is the best activity base for its manufacturing overhead. The estimate of annual overhead costs for its job was $2,050,00. The company used 1,000 hours of processing on Job No. B12 during the period and incurred overhead costs totaling $2,100,000. The budgeted machine hours for the year totaled 20,000. How much overhead should be applied to Job No. B12?

$102,500 $2,050,000 / 20,000 = 102.50 per direct labor hour; 1,000 x $102.50 = $105,500

Barr Mfg. provided the following information from its accounting records for 2019: Expected production 60,000 labor hours Actual production 56,000 labor hours Budgeted overhead $900,000 Actual overhead $870,000 How much is the overhead application rate if Barr bases the rate on direct labor hours?

$15.00 per hour $900,000 / 60,000 = $15.00 per direct labor hour

A process with no beginning work in process, completed and transferred out 85,000 units during a period and had 50,000 units in the ending work in process inventory that were 30% complete. The equivalent units of production for the period were:

100,000 equivalent units (50,000 units x 30%) + 85,000 = 100,000

A process began the month with 3,000 units in the beginning work in process inventory and ended the month with 2,000 units in the ending work in process. If 22,000 units were completed and transferred out of the process during the month, how many units were started into production during the month?

21,000 2,000 + 22,000 = 24,000; 3,000 + x = 24,000; x = 21,000

What is work in process inventory generally described as?

Cost applicable to units that have been started in production but are not partially completed

Which of the following is not an internal user

Creditor

Managerial accounting applied to each of the following types of businesses EXEPT

Managerial accounting apples to all types of firms

Which one of the following characteristics would likely be associated with just-in-time inventory method

Minimal finished goods inventory on hand

If actual overhead is less than applied manufacturing overhead, then manufacturing overhead is:

Overapplied

A manager that is establishing objectives is performing which management function?

Planning

finanical and managerial accounting are similar in that both

deal with the economic events of an enterprise

Materials requisitions are

generally used less frequently in process costing than job order costing.

Factory labor costs

include vacation pay

Process costing is not used when

jobs have distinguishing characteristics.

Managerial accounting information is generally prepared for

manager

It is necessary to calculate equivalent units of production in a department because

some units worked on in the department are not fully complete

Which of these best reflects a distinguishing factor between a job order cost system and a process cost system

the number of work in process accounts

Process costing is used when

the production process is continuous

Molina Company has beginning and ending work in process inventories of $130,000 and $145,000 respectively. If total manufacturing costs added to productions are $680,000, what is the total cost of goods manufactured?

$665,000 $130,000 + $680,000 - $145,000 = $665,000

Edmiston Company reported the following year-end information: beginning work in process inventory, $80,000; cost of goods manufactured, $750,000; beginning finished goods inventory, $50,000; ending work in process inventory, $70,000; and ending finished goods inventory, $40,000. How much is Edmiston's cost of goods sold for the year?

$769,000 $50,000 + $750,000 - $40,000 = $760,000

A process cost system would most likely be used by a company that makes

breakfast cereal

Hanker Company had the following department data on physical units: Work in process, beginning 3,000 Completed and transferred out 18,000 Work in process, ending 2,400 Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period?

$20,400 (2,400 units x 100%) + 18,000 = 20,400

Penner Company reported total manufacturing cost to production of $450,000. If manufacturing overhead totaled $78,000, and direct materials totaled $96,000, how much is direct labor cost?

$276,000 $450,000 - $96,000 - $78,000 = $276,000

Norman Company manufactures customized desks. The following pertains to Job No. 953: Direct materials used $22,800 Direct labor hours worked 600 Direct labor rate per hour $16.00 Machine hours used 400 Applied factory overhead rate per machine hour $30.00 What is the total manufacturing cost for Job No. 953?

$44,400 $22,800 +(600 x $16) + (400 x $30) = $44,400

Materials costs of $1,200,000 and conversion costs of $1,530,000 were charged to a processing department in the month of September. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process, 20,000 units were started into production in September, and there were 5,000 units in the ending work in process that were 40% complete at the end of September. What was the total amount of manufacturing costs assigned to the 5,000 units in the ending work in process ?

$480,000

Indicate whether each of the following costs of a pencil manufactures would be classified as Direct Materials (DM), Direct Labor (DL), or manufacturing Overhead (MOH)

Depreciation on bicycle painting machinery: MOH Bicycle seats: DM Factory Utilities: MOH Wages of assembly line worker: DL Salary of production supervisor: MOH Factory machinery maintenance: MOH Metal used to produce fenders: DM Tires: DM

Identify whether each of the following is classified as a product cost or a period cost.

Direct Materials (DM) : Product Factory Utilities : Product Repairs to office equipment : Period Property Taxes on factory building: Product Sales Salaries : Period

A company assigned overhead to work in process. At year end, what does the amount of overapplied overhead mean?

The overhead assigned to work in process is greater than the overhead incurred.