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Question 2.2. (TCO1) Josies Grill budgeted the following costs for a month in which
1,500 steak dinners will be produced and sold: materials, $4,080; hourly labor
(variable), $5,200; rent (fixed), $1,700; depreciation, $800; and other fixed costs,
$600. Each steak dinner sells for $14.00 each. How much is the budgeted variable
cost per unit? (Points : 7)
$6.19
$8.25
$6.72
$5.80
Question 3.3. (TCO 1) Which of the following is NOT a period cost? (Points : 7)
Advertising cost
Direct Material
Accounting staff salaries
Depreciation on accounting office equipment
Question 4.4. (TCO 1) On December 31, 2015, GLE Inc. has a balance in the Work-inProcess Inventory account of $62,000. On January 1, 2015, the balance was
$55,000. Current manufacturing costs for the year are $292,000, and cost of goods
sold is $284,000. How much is cost of goods manufactured? (Points : 7)
$292,000
$299,000
$277,000
$285,000
Question 6.6. (TCO 2) During 2015, Michael Company applied overhead using a joborder costing system at a rate of $15 per direct labor hours. Estimated direct labor
hours for the year were 150,000, and estimated overhead for the year was
$2,250,000. Actual direct labor hours for 201 were 140,000, and actual overhead
was $2,400,000.
What is the amount of under- or over-applied overhead for the year? (Points : 7)
$300,000 under-applied
$20,000 under-applied
$300,000 over-applied
$120,000 over-applied
Question 2.2. (TCO 6) Smile Labs develops 35mm film using a four-step process that
moves progressively through four departments. The company specializes in
overnight service and has the largest drug store chain as its primary customer.
Currently, direct labor, direct materials, and overhead are accumulated by
department. The cost accumulation system that best describes the system that
Smile Labs is using is: (Points : 7)
operation costing.
activity-based costing.
job order costing.
process costing.
(TCO 2) Sweet Co. uses budgeted overhead rates to apply overhead to individual
jobs. They use a system based on direct labor hours. Last year, the company made
the following estimates for this year.Direct labor costs
$48,000,000
Factory overhead costs
$6,400,000
Direct Labor Hours
80,000
Machine Hours
110,000(a) What is the budgeted overhead rate for
the company?
(b) If Job #34567 had the following:
(TCO 3) Adnan Company uses process costing. At the beginning of the month, there
were 8,000 units in process, 90% complete with respect to material and 80%
complete with respect to conversion costs. 40,000 units were started during the
month and 40,000 units were completed. The units in ending Work-In-Process
Inventory were 70% complete with respect to material and 10% complete with
respect to conversion costs. How many equivalent units will be used in calculating
the cost per unit for materials?(Points : 30)Ans) Equivalent units for materials =
(40000 x 100%) + (8000 x 70%) = 45600 units
(TCO 6) Handy Display Company manufactures display cases to be sold to retail
stores. The cases come in three sizes: large, medium, and small. Currently, Handy
Display Company uses a single plant-wide overhead rate to allocate its $3,357,800
of annual manufacturing overhead. Of this amount, $820,000 is associated with the
Large Case line, $1,276,800 is associated with the Medium Case line, and
$1,261,000 is associated with the Small Case line. Handy Display Company is
currently running a total of 33,000 machine hours: 10,000 in the Large Case line,
13,300 in the Medium Case line, and 9,700 in the Small Case line. Handy Display
Company uses machine hours as the cost driver for manufacturing overhead costs.
(TCO 2)
Fred Co. incurred costs of $800,000 for direct materials (raw) purchased. Direct
labor was $5,000 and factory overhead was $15,000 for March.Inventories were as
follows:
Raw materials beginning $2,000; raw materials ending $4,000;Work-in-process
beginning $210,000; work-in-process ending $190,000;
Finished goods beginning $13,000; finished goods ending $12,500;
What is the cost of goods manufactured? Please show your work. (Points : 30)