ACCY exam 2

Which of the following is not an assumption underlying cost-volume-profit analysis? a.Total sales and total costs can be represented by straight lines. b.Costs can be accurately divided into fixed and variable components. c.The break-even point will be passed during the period. d.The sales mix is constant.

The break-even point will be passed during the period.

In the manufacture of 9,800 units of a product, direct materials cost incurred was $174,300, direct labor cost incurred was $112,600, and applied factory overhead was $49,600. What is the total conversion cost? a.$162,200 b.$174,300 c.$336,500 d.$49,600

$162,200 Total conversion cost = Direct labor + Factory overhead = $112,600 + $49,600 = $162,200

The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured: a.are equal to or greater than units sold b.equal units sold c.are less than units sold d.exceed units sold

exceed units sold

Which of the following is not a factory overhead allocation method? a.multiple departmental rates b.single plantwide rate c.activity-based costing d.factory costing

factory costing

The three categories of manufacturing costs comprising the total cost of work in process are direct labor, direct materials, and: a.accounting salaries expense b.direct expenses c.factory overhead d.selling expenses

factory overhead

Which of the following would not be an appropriate activity base for cost analysis in a service firm? a.haircuts given b.lawns mowed c.customers served d.inventory produced

inventory produced

The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents: a.the maximum possible operating income b.the total fixed costs c.the maximum possible operating loss d.the break-even point

the break-even point

What term is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and variable factory overhead cost? a.Variable costing b.Absorption costing c.Differential costing d.Standard costing

Variable costing

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.The journal entry to record the flow of costs into Department 1 for direct labor is: a.Work in Process—Department 1 65,000 Wages Payable 65,000 b.Wages Payable 125,000 Work in Process—Department 1 125,000 c.Work in Process—Department 1 125,000 Wages Payable 125,000 d.Wages Payable 65,000 Work in Process—Department 1 65,000

Work in Process—Department 1 125,000 Wages Payable 125,000

In a process cost system, the amount of work in process inventory is valued by: a.allocating departmental costs between completed and partially completed units b.multiplying units in ending inventory by the direct materials cost per unit c.finding the sum of all open job costs d.finding the sum of all completed jobs

allocating departmental costs between completed and partially completed units

If fixed costs increased and variable costs per unit decreased, the break-even point would: a.decrease b.increase c.remain the same d.cannot be determined from the data provided.

cannot be determined from the data provided.

The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed: a.cost-volume-profit analysis b.budgetary analysis c.contribution margin analysis d.gross profit analysis

cost-volume-profit analysis

Using multiple department factory overhead instead of a single plantwide factory overhead rate: a.is simpler and less expensive to compute than a plantwide rate b.results in distorted product costs c.applies overhead costs to all departments equally d.results in more accurate product costs

d.results in more accurate product costs

According to the lean manufacturing philosophy, __________________ a.finished goods should always be available in case a customer wants something b.employees should be expert at one function rather than be cross-trained for multiple functions c.movement of the product and material is reduced d.the product moves from process to process until completion

movement of the product and material is reduced

In process cost accounting, the costs of direct materials and direct labor are charged directly to___________ a.job orders b.customer accounts receivable c.service departments d.processing departments

processing departments

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes? a.salary of a factory supervisor b.direct materials c.direct labor d.units-of-production depreciation on factory equipment

salary of a factory supervisor

Under variable costing, which of the following costs would not be included in finished goods inventory? a.electricity used by factory machinery b.wages of machine operator c.steel costs for a machine tool manufacturer d.salary of factory supervisor

salary of factory supervisor

The relative distribution of sales among various products sold is referred to as the: a.joint product mix b.sales mix c.by-product mix d.profit mix

sales mix

The Tom Company reports the following data. Sales $166,782 Variable costs 86,982 Fixed costs 37,800 Determine Tom Company's operating leverage. Round your answer to one decimal place: ______________________

1.9 ($166,782 - $86,982)/($166,782 - $86,982 - $37,800) = 1.9

Using a plantwide factory overhead rate distorts product costs when: a.significant differences exist in the factory overhead rates used across different production departments b.products require different ratios of allocation-base usage in each production department c.Both "products require different ratios of allocation-base usage in each production department" and "significant differences exist in the factory overhead rates used across different production departments" are true. d.Neither "products require different ratios of allocation-base usage in each production department" nor significant differences exist in the factory overhead rates used across different production departments" are true.

Both "products require different ratios of allocation-base usage in each production department" and "significant differences exist in the factory overhead rates used across different production departments" are true.

Which of the following statements is true regarding fixed and variable costs? a.Variable costs are constant in total, and fixed costs vary in total. b.Both costs are constant when considered on a per-unit basis. c.Both costs are constant when considered on a total basis. d.Fixed costs are constant in total, and variable costs are constant per unit.

Fixed costs are constant in total, and variable costs are constant per unit.

Given the following cost and activity observations for George Company's utilities, use the high-low method to calculate George's variable utilities costs per machine hour. Cost Machine Hours May $16,500 105,000 June 18,000 120,000 July 16,000 100,000 August 17,500 117,000 a.$1.00 b.$10.00 c.$100.00 d.$0.10

$0.10 Difference in total cost = Total cost (highest level) - Total cost (lowest level) = $18,000 - $16,000 = $2,000 Variable Cost per Machine Hour = Difference in Total Cost / Difference in Machine Hours = $2,000 / (120,000 - 100,000) = $0.10

The cost of energy consumed in producing good units in the Bottling Department of Mountain Springs Water Company was $1,024 and $936 for June and July, respectively. The number of equivalent units produced in June and July was 6,400 and 7,200 liters, respectively. Evaluate the change in the cost of energy between the two months. Energy cost per unit in June (to the nearest cent)________________ Energy cost per unit in July (to the nearest cent)_________________

$0.16 $0.13 Energy costs per liter, June: $1,024/6,400 liters Energy costs per liter, July: $936/7,200 liters

Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to calculate Smithson's fixed costs per month. Round your final answer to the nearest dollar. Do not round interim calculations. Cost Machine Hours January $26,800 9,800 February 36,200 17,800 March 28,000 12,400 April 31,400 14,900 a.$15,285 b.$48,912 c.$25,985 d.$12,228

$15,285 Difference in total cost = Total cost (Highest Level) - Total cost (Lowest Level) = $36,200 - $26,800 = $9,400 Variable Cost per Machine Hour = Difference in Total Cost / Difference in Machine Hours = $9,400 / (17,800 - 9,800) = $1.175 Total Fixed Costs (Highest Level) = Total Costs - (Variable Cost per Unit × Machine Hours) = $36,200 - ($1.175 × 17,800) = $15,285

If variable cost of goods sold totaled $97,800 for the year (16,300 units at $6 each) and the planned variable cost of goods sold totaled $93,170 (13,310 units at $7 each), the effect of the unit cost factor on the change in contribution margin is: a.$17,940 increase b.$17,940 decrease c.$16,300 decrease d.$16,300 increase

$16,300 increase Unit Cost Factor = (Planned Cost per Unit - Actual Cost per Unit) × Actual Units SoldUnit Cost Factor = ($7 - $6) × 16,300 units = $16,300

If the contribution margin ratio for France Company is 46%, sales were $455,000, and fixed costs were $107,000, what was the income from operations? a.$102,300 b.$107,000 c.$81,840 d.$209,300

102,300 Contribution Margin Ratio = Contribution Margin / SalesContribution Margin = 46% × $455,000 = $209,300 Income from operations = Contribution margin - Fixed costs = $209,300 - $107,000 = $102,300

Start of chapter 20: Question Content Area If the variable selling and administrative expenses totaled $124,000 for the year (80,000 units at $1.55 each) and the planned variable selling and administrative expenses totaled $136,500 (78,000 units at $1.75 each), the effect of the quantity factor on the change in contribution margin is: a.$3,500 increase b.$3,000 decrease c.$3,000 increase d.$3,500 decrease

3,500 Variable Cost Quantity Factor = (Planned Units of Sales - Actual Units Sold) × Planned Unit Cost Variable Cost Quantity Factor = (78,000 units - 80,000 units) × $1.75 = -$3,500

Harley Company has sales of $500,000, variable costs are 75% of sales, and operating income is $40,000. What is Harley's operating leverage? a.3.1 b.1.2 c.1.3 d.0.0

3.1 Operating Leverage = Contribution Margin / Income from Operations = (($500,000 - ($500,000 × 75%)) / $40,000 = 3.1

Department R had 4,300 units in work in process that were 68% completed as to labor and overhead at the beginning of the period; 31,400 units of direct materials were added during the period; 33,100 units were completed during the period; and 2,600 units were 22% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was: a.33,100 b.40,000 c.35,048 d.30,748

30,748 Number of equivalent units for conversion costs during the period = [(4,300 units × 32%) + (33,100 units - 4,300 units) + (2,600 units × 22%)] = 30,748 units

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit? a.66,000 b.70,125 c.60,000 d.74,800

66,000 Break-Even Sales (units) = Fixed Costs / Unit Contribution Margin = $561,000 / ($8 + $0.50) = 66,000 units

The manufacturing cost of Mocha Industries for three months of the year are provided below: Total Cost Production April $92,191 1,770 Units May 98,084 2,480 Units June 107,297 3,590 Units (a) Using the high-low method, determine the variable cost per unit. Round your answers to two decimal places: __________________ per unit (b) Using the high-low method, determine total fixed costs. ___________________

8.3 per unit ($107,297 - $92,191)/(3,590 - 1,770) = $8.30 per unit 77,500 $107,297 - ($8.30 x 3,590) = $77,500

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.The journal entry to record the flow of costs into Department 1 during the period for applied overhead is a.Work in Process—Department 1125,000 Factory Overhead—Department 1125,000 b.Factory Overhead—Department 1150,000 Work in Process—Department 1150,000 c.Work in Process—Department 180,000 Factory Overhead—Department 180,000 d.Work in Process—Department 1150,000 Factory Overhead—Department 1150,000

Work in Process—Department 1150,000 Factory Overhead—Department 1150,000

Costs that can be influenced by management at a specific level of management are called: a.controllable costs. b.noncontrollable costs. c.direct costs. d.variable costs.

controllable costs.

Question Content AreaManagement will use both variable and absorption costing in all of the following activities except: a.controlling inventory levels b.product pricing c.controlling costs d.production planning

controlling inventory levels

Which of the following would use a process costing system? a.lumber mill b.custom helicopter manufacturer c.custom home builder d.graduation photographer

lumber mill

If variable costs per unit decreased because of a decrease in utility rates, the break-even point would: a.decrease b.increase c.remain the same d.increase or decrease, depending upon the percentage increase in utility rates

decrease

Challenger Factory produces two similar products - regular widgets and deluxe widgets. The total plant overhead budget is $526,200 with 395,400 estimated direct labor hours. It is further estimated that deluxe widget production will need 2 direct labor hours for each unit and regular widget production will require 5 direct labor hours for each unit. Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Challenger Factory allocate to deluxe widget production if budgeted production for the period is 47,500 units and actual production for the period is 58,000 units? a.$442,492 b.$154,280 c.$395,083 d.$94,820

$154,280 $526,200 ÷ 395,400 direct labor hours = $1.33 2 direct labor hours × 58,000 units = 116,000 $1.33 × 116,000 direct labor hours = $154,280

Start of chapter 18: Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is $586,000 with 534,000 estimated direct labor hours. It is further estimated that small lamp production will require 280,000 direct labor hours and desk lamp production will need 254,000 direct labor hours. Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to desk lamp production if actual direct hours for the period is 179,000. a.$412,969 b.$916,648 c.$196,900 d.$389,100

$196,900 Single Plantwide Factory Overhead Rate = Total Budgeted Plant Overhead ÷ Total Budgeted Plantwide Allocation Base Single Plantwide Factory Overhead Rate = $586,000 ÷ 534,000 direct labor hours = $1.10 per direct labor hour. Overhead allocated to the period = Single plantwide factory overhead rate × Actual direct labor hours for the period for desk lamp production = $1.10 × 179,000 direct labor hours = $196,900 The factory overhead allocated to desk lamp production is $196,900.

If fixed costs are $850,000 and variable costs are 60% of sales, what is the break-even point (dollars)? a.$1,416,666 b.$3,400,000 c.$340,000 d.$2,125,000

$2,125,000 Break-Even Sales (dollars) = Fixed Costs / Contribution Margin Ratio = $850,000 / (1 - 0.6) = $2,125,000

April 1, work in process: Materials cost, 3,000 units. $7,002 Conversion costs, 3,000 units, 40% completed 5,787 Materials added during April, 10,000 units. 25,972. Conversion costs during April. 30,362 Goods finished during April, 12,000 units 0 April 30 work in process, 1,000 units, 40% completed. 0 All direct materials are added at the beginning of the process, and the first-in, first-out method is used to cost inventories. The conversion cost per equivalent unit for April is: All direct materials are added at the beginning of the process, and the first-in, first-out method is used to cost inventories. The conversion cost per equivalent unit for April is: a.$2.64 b.$2.71 c.$2.34 d.$3.04

$2.71 Equivalent units = (3,000 × 60%) + (12,000 - 3,000) + (1,000 × 40%) = 11,200 units Conversion cost per equivalent unit = $30,362 / 11,200 = $2.71 per unit

If variable selling and administrative expenses totaled $120,000 for the year (80,000 units at $1.50 each) and the planned variable selling and administrative expenses totaled $136,500 (78,000 units at $1.75 each), the effect of the unit cost factor on the change in contribution margin is: a.$20,000 increase b.$20,000 decrease c.$19,500 decrease d.$19,500 increase

$20,000 increase The effect of the unit cost factor on the change in the contribution margin is as follows: Unit Cost Factor = (Planned Cost per Unit - Actual Cost per Unit) × Actual Units SoldUnit Cost Factor = ($1.75 - $1.50) × 80,000 units = $20,000

The level of inventory of a manufactured product has increased by 7,744 units during a period. The following data are also available: Variable Fixed Unit manf. costs of the period $14 $3 Unit oper. expenses of the period. $4. $5 What would be the effect on income from operations if variable costing is used rather than absorption costing? a.$23,232 increase b.$61,952 increase c.$61,952 decrease d.$23,232 decrease

$23,232 decrease Under variable costing, only variable manufacturing costs are included in the cost of the product manufactured, whereas under absorption costing, both variable and fixed manufacturing costs are included in the cost of the product manufactured. Therefore, if variable costing is used and the inventory level increases by 7,744 units, income from operations would decrease by $3 × 7,744 units = $23,232.

Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. (Product) Overhead DLH A B Painting Dept. $244,100 10,900 dlh 5 dlh 11 dlh Finishing Dept. 63,600 10,800 3 8 Totals $307,700 21,700 dlh 8dlh 19dlh Using a single plantwide rate, determine the overhead rate per unit for Blue Ridge Marketing Inc.'s Product B. $14.18 $113.44 $111.97 $269.42

$269.42

Department J had no work in process at the beginning of the period; 18,000 units were completed during the period; and 2,000 units were 30% completed at the end of the period. The following manufacturing costs were debited to the departmental work in process account during the period (Assume the company uses FIFO and rounds cost per unit to two decimal places): Direct materials (20,000 at $5). $100,000 Direct labor 142,300 Factory overhead 57,200 Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the 18,000 units completed during the period? a.$16,438 b.$90,000 c.$193,140 d.$283,140

$283,140 Direct material cost =18,000 units×$5= $90,000 Equivalent completed units in ending inventory = 2,000 × 30% = 600 units Total units started and completed = 18,000 + 600 = 18,600 units Conversion cost = ($142,300 + $57,200) / 18,600 = $10.73 per unit Total cost = $90,000 + ($10.73 × 18,000) = $283,140

The Kaumajet Factory produces two products - table lamps and desk lamps. It has two separate departments - Finishing and Production. The overhead budget for the Finishing Department is $722,034, using 445,700 direct labor hours. The overhead budget for the Production Department is $291,040 using 54,400 direct labor hours. If the budget estimates that a desk lamp will require 2 hours of finishing and 5 hours of production, how much factory overhead will the Kaumajet Factory allocate to each unit of desk lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours? a.$18.62 b.$130.35 c.$5.35 d.$29.99

$29.99 Finishing Department: 2 direct labor hours × $1.62* per dlh = $3.24 Production Department: 5 direct labor hours × $5.35** per dlh = $26.75 --------- $29.99

Department F had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $13,300. Of the $13,300, $7,400 was for material and $5,900 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $29,600. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $33,100 and factory overhead was $19,300. If the average cost method is used, the conversion cost per unit (to the nearest cent) would be: a.$3.89 b.$3.24 c.$3.38 d.$5.30

$3.38 Equivalent units = 15,000 units + (3,000 × 75%) units = 17,250 units Conversion cost per equivalent unit = ($5,900 + $33,100 + $19,300) / 17,250 = $3.38 per equivalent unit

Department G had 1,920 units 25% completed at the beginning of the period, 12,400 units were completed during the period, 1,600 units were 20% completed at the end of the period, and the following manufacturing costs debited to the departmental work in process account during the period: Work in process, beginning of period $26,300 Costs added during period: Direct materials (12,080 units at $9) 108,720 Direct labor 84,000 Factory overhead 28,000 All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used. What is the total cost of 1,920 units of beginning inventory which were completed during the period (round unit cost calculations to four decimal places and round your final answer to the nearest dollar)? a.$36,841 b.$26,300 c.$41,076 d.$39,476

$39,476 Total cost of units of beginning inventory = $26,300 + [($112,000 / 12,240) × 1,440] = $39,476

Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the period, 2,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: Work in process, beginning of period $60,000 Costs added during period: Direct materials (10,400 at $9.8365) 102,300 Direct labor 79,800 Factory overhead 25,200 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the material and conversion cost per unit (to the nearest penny), respectively. a.$9.84 and $9.58 b.$5.94 and $6.38 c.$8.00 and $8.68 d.$5.94 and $5.86

$9.84 and $9.58 Equivalent units for direct materials = (12,000 - 3,600) + 2,000 = 10,400 units Equivalent units for conversion cost = (3,600 × 60%) + (12,000 - 3,600) + (2,000 × 20%) = 10,960 units Material cost per equivalent unit = $102,300 / 10,400 = $9.84 per unit. Material cost per equivalent unit = $105,000 / 10,960 = $9.58 per unit

Department W had 2,700 units, one-third completed at the beginning of the period; 12,700 units were transferred to Department X from Department W during the period; and 800 units were one-half completed at the end of the period. Assume the completion ratios apply to direct materials and conversion costs. What is the equivalent units of production used to compute unit conversion cost on the cost of production report for Department W? Assume the company uses FIFO. a.16,200 units b.10,000 units c.11,800 units d.12,200 units

12,200 Equivalent units for conversion costs = (2,700 × 66.67%) + (12,700 - 2,700) + (800 × 50%) = 12,200 units

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: On July 1: Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000 During July: Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520 On July 31: Ending inventories 1,600 units, 40% complete Using the FIFO method, the number of equivalent units of conversion costs was: a.14,550 b.14,380 c.15,850 d.14,400

14,380 Equivalent units for conversion costs = (850 × 40%) + (15,000 - 1,600) + (1,600 × 40%) = 14,380 units

Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was: a.14,365 b.15,865 c.13,615 d.12,000

15,865 Equivalent units = (3,000 × 75%) + (15,000 - 3,000) + (1,700 × 95%) = 15,865 units

Manley Co. manufactures office furniture. During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625. In its slowest month, the company made 1,800 desks at a cost of $49,500. Using the high-low method of cost estimation, total fixed costs are: a.$33,875 b.$24,750 c.$61,875 d.cannot be determined from the data given.

24,750 Difference in total cost = Total cost (highest level) - Total cost (lowest level) = $86,625 - $49,500 = $37,125 Variable Cost per Unit = Difference in Total Cost / Difference in Machine Hours = $37,125 / (4,500 - 1,800) = $13.75 Total Fixed Costs (highest level) = Total Costs - (Variable Cost per Unit × Machine Hours) = $86,625 - ($13.75 × 4,500) = $24,750

Start of 19: If fixed costs are $264,000, the unit selling price is $29, and the unit variable costs are $21, what is the break-even sales (units) if fixed costs are reduced by $37,100? a.22,690 units b.42,544 units c.28,363 units d.34,035 units

28,363 units Break-Even Sales (units) = Fixed Costs / Unit Contribution Margin = ($264,000 - $37,100) / ($29 - $21) = 28,363 units

The following unit data were assembled for the assembly process of the Super Co. for the month of April. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO method. Beginning work in process, (60% completed). 5,000 Units started in April 48,000 Ending work in process, (30% completed). 4,000 The number of equivalent units produced with respect to conversion costs is: a.46,200 b.48,000 c.50,200 d.53,000

46,200 Equivalent units = (5,000 × 40%) + (48,000 - 5,000) + (4,000 × 30%) = 46,200 units

Carmelita Inc., has the following information available: Costs from Beg Inv. Costs from current Period Direct materials. $5,700. $24,300 Conversion costs. 5,400. 155,200 At the beginning of the period, there were 600 units in process that were 44% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,800 units were started and completed. Ending inventory contained 300 units that were 28% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method. The equivalent units of production for direct materials and conversion costs, respectively, were: a.5,220 for direct materials and 5,100 for conversion costs b.5,220 for direct materials and 5,220 for conversion costs c.4,800 for direct materials and 5,220 for conversion costs d.5,100 for direct materials and 5,220 for conversion costs

5,100 for direct materials and 5,220 for conversion costs Equivalent units for direct materials = Number of units of direct materials added during the period = 4,800 + 300 = 5,100 units Equivalent units for conversion costs = (600 × 56%) + (4,800) + (300 × 28%) = 5,220 units

The total factory overhead for Big Light Company is budgeted for the year at $2,025,220. Big Light manufactures two different products, night lights and desk lamps. Night lights is budgeted for 16,600 units. Each night light requires two hour of direct labor. Desk lamps is budgeted for 19,900 units. Each desk lamp requires three hours of direct labor. Determine the total number of budgeted direct labor hours for year: ______________________ Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. Round your answer to two decimal places, if necessary. _________________________ Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate calculated in (b). Round your answers to two decimal places, if necessary. Night lights: ____________ per unit Desk lamps:_____________ per unit

92,900 (16,600 × 2) + (19,900 × 3) = 92,900 direct labor hours 21.8 $2,025,220/92,900 = $21.80 per direct labor hour 43.6 Night Lights = $21.80 × 2 = $43.60 per unit 65.40 Desk Lamps = $21.80 × 3 = $65.40 per unit

Common allocation bases are: a.machine dollars, direct labor dollars, direct labor hours b.direct labor dollars, direct labor hours, machine hours c.direct labor dollars, direct labor hours, machine dollars d.direct labor dollars, direct labor hours, direct material dollars

direct labor dollars, direct labor hours, machine hours