“Week
6 Homework 18-21
Multiple choice (5 pts
each) (highlight or clearly mark your answer)

1) Which of the following will be included in manufacturing overhead costs?
a.
Indirect labor and indirect
materials
b.
Salaries of salesmen
c.
Direct materials and direct labor
d.
Delivery costs to ship goods to
customers

2)
Product costs are expensed:
a.
when the products are consumed
or sold.
b.
at the end of the accounting
period they are incurred in.
c.
when the products are
transferred to Work-in-Process Inventory account.
d.
when the market value of
products goes above the recorded value.

3)
Which of the following
correctly describes the accounting for administrative expenses of a
manufacturing company?
a.
Administrative expenses are
product costs and are expensed as incurred.
b.
Administrative expenses are
period costs and are expensed as incurred.
c.
Administrative expenses are
product costs and are expensed when the manufactured product is sold.
d.
Administrative expenses are
period costs and are expensed when the manufactured product is sold.

4)
Alexandra’s Designs, a fashion
boutique, incurred the following in the month of September:

Salaries paid to designers

$140,000

Wages paid to tailors

30,000

Indirect wages

10,000

What is the journal entry to record the
total labor charges incurred during September?
A)

Work-in-Process Inventory (direct labor)

170,000

Manufacturing Overhead (indirect labor)

10,000

Wages payable

180,000

B)

Work-in-Process Inventory (direct labor)

180,000

Wages Payable

180,000

C)

Wages Payable

180,000

Finished Goods Inventory

150,000

Work-in-Process Inventory (direct labor)

30,000

D)

Manufacturing Overhead (indirect labor)

180,000

Wages Payable

180,000

5)
Which of the following is both
a prime cost and a conversion cost?
a.
Manufacturing overhead
b.
Direct materials
c.
Direct labor
d.
Selling expenses

6)
Which of the following will be
classified as a conversion cost?
a.
Cost of raw materials
b.
Depreciation on factory
equipment
c.
Salary of sales personnel
d.
Depreciation on office
furniture

Problems (10 pts each)
(please show your work for partial credit)

1)
Selected data for Lemon Grass
Company for 2015 is provided below:

Factory Utilities

$
1,500

Indirect Materials Used

37,500

Direct Materials Used

300,000

Property Taxes on Factory Building

6,900

Sales Commissions

85,000

Indirect Labor Incurred

25,000

Direct Labor Incurred

150,000

Depreciation on Factory Equipment

6,500

What is the total factory overhead?

2)
At the beginning of 2015, Swift
Company’s Work-in-Process Inventory account had a balance of $120,000. During
2015, $250,000 of direct materials were used in production, and $75,000 of
direct labor costs were incurred. Manufacturing overhead amounted to $850,000.
The cost of goods manufactured was $675,000. What is the balance in the
Work-in-Process Inventory account on December 31, 2015?

3)
AceTravel
Services provided the following information:

Cost allocation rate for direct labor: $40 per hour
Cost allocation rate for indirect costs: $22 per hour

If Ace receives $350 for a job requiring 5 hours of direct labor,
then how much profit will they make?

4)
Reed Production has provided
the following information for the year 2015:

Direct Labor

$153,000

Beginning Work-in-Process Inventory

62,500

Direct Materials Used

271,000

Ending Work-in-Process Inventory

53,850

Manufacturing Overhead

135,500

During the year, Reed produced 71,020
units of product. Calculate the per unit product cost.

5)
Ruth Company incurred the
following costs in July:

Units produced

1,000
units

Direct materials

$
30 per unit

Direct labor

$25
per unit

Variable manufacturing overhead

$10
per unit

Fixed manufacturing overhead

$7,000
per month

Variable selling and administrative
costs

$8
per unit

Fixed selling and administrative costs

$2,000
per month

Calculate the total product cost using
absorption costing and variable costing.

6)
LDR Manufacturing produces a
pesticide chemical and uses process costing. There are three processing
departmentsMixing, Refining, and Packaging. On January 1, 2014, the first
department, Mixing, had no beginning inventory. During January, 40,000 fl. oz.
of chemicals were started in production. Of these, 32,000 fl. oz. were
completed and 8,000 fl. oz. remained in process. In the Mixing Department, all
direct materials are added at the beginning of the production process and
conversion costs are applied evenly through the process.

At the end of the month, LDR calculated
equivalent units. The ending inventory in the Mixing Department was 60%
complete with respect to conversion costs. With respect to conversion costs,
how many equivalent units were calculated for the product that was completed
and for ending inventory?

7)
Margaret sells hand-knit
scarves at a flea market. Each scarf sells for $25. Margaret pays $30 to rent a
vending space for one day. The variable costs are $15 per scarf. How many scarves
should she sell each day in order to break even?

Week
6 Homework 18-21Multiple choice (5 pts
each) (highlight or clearly mark your answer)1)
Which of the following will be
included in manufacturing overhead costs?a.
Indirect labor and indirect
materialsb.
Salaries of salesmenc.
Direct materials and direct labord.
Delivery costs to ship goods to
customers2)
Product costs are expensed:a.
when the products are consumed
or sold.b.
at the end of the accounting
period they are incurred in.c.
when the products are
transferred to Work-in-Process Inventory account.d.
when the market value of
products goes above the recorded value.3)
Which of the following
correctly describes the accounting for administrative expenses of a
manufacturing company?a.
Administrative expenses are
product costs and are expensed as incurred.b.
Administrative expenses are
period costs and are expensed as incurred.c.
Administrative expenses are
product costs and are expensed when the manufactured product is sold.d.
Administrative expenses are
period costs and are expensed when the manufactured product is sold.4)
Alexandra’s Designs, a fashion
boutique, incurred the following in the month of September:Salaries paid to designers$140,000Wages paid to tailors30,000Indirect wages10,000What is the journal entry to record the
total labor charges incurred during September?A) Work-in-Process Inventory (direct labor)170,000Manufacturing Overhead (indirect labor)10,000
Wages payable180,000B) Work-in-Process Inventory (direct labor)180,000
Wages Payable180,000C) Wages Payable180,000
Finished Goods Inventory150,000
Work-in-Process Inventory (direct labor)30,000D) Manufacturing Overhead (indirect labor)180,000
Wages Payable180,0005)
Which of the following is both
a prime cost and a conversion cost?a.
Manufacturing overheadb.
Direct materialsc.
Direct labord.
Selling expenses6)
Which of the following will be
classified as a conversion cost?a.
Cost of raw materialsb.
Depreciation on factory
equipmentc.
Salary of sales personneld.
Depreciation on office
furnitureProblems (10 pts each)
(please show your work for partial credit)1)
Selected data for Lemon Grass
Company for 2015 is provided below:Factory Utilities$
1,500Indirect Materials Used37,500Direct Materials Used300,000Property Taxes on Factory Building6,900Sales Commissions85,000Indirect Labor Incurred25,000Direct Labor Incurred150,000Depreciation on Factory Equipment6,500What is the total factory overhead?2)
At the beginning of 2015, Swift
Company’s Work-in-Process Inventory account had a balance of $120,000. During
2015, $250,000 of direct materials were used in production, and $75,000 of
direct labor costs were incurred. Manufacturing overhead amounted to $850,000.
The cost of goods manufactured was $675,000. What is the balance in the
Work-in-Process Inventory account on December 31, 2015?3)
AceTravel
Services provided the following information:Cost allocation rate for direct labor: $40 per hourCost allocation rate for indirect costs: $22 per hourIf Ace receives $350 for a job requiring 5 hours of direct labor,
then how much profit will they make?4)
Reed Production has provided
the following information for the year 2015:Direct Labor$153,000Beginning Work-in-Process Inventory62,500Direct Materials Used271,000Ending Work-in-Process Inventory53,850Manufacturing Overhead135,500During the year, Reed produced 71,020
units of product. Calculate the per unit product cost.5)
Ruth Company incurred the
following costs in July:Units produced1,000
unitsDirect materials$
30 per unitDirect labor$25
per unitVariable manufacturing overhead$10
per unitFixed manufacturing overhead$7,000
per monthVariable selling and administrative
costs$8
per unitFixed selling and administrative costs$2,000
per monthCalculate the total product cost using
absorption costing and variable costing.6)
LDR Manufacturing produces a
pesticide chemical and uses process costing. There are three processing
departmentsMixing, Refining, and Packaging. On January 1, 2014, the first
department, Mixing, had no beginning inventory. During January, 40,000 fl. oz.
of chemicals were started in production. Of these, 32,000 fl. oz. were
completed and 8,000 fl. oz. remained in process. In the Mixing Department, all
direct materials are added at the beginning of the production process and
conversion costs are applied evenly through the process.At the end of the month, LDR calculated
equivalent units. The ending inventory in the Mixing Department was 60%
complete with respect to conversion costs. With respect to conversion costs,
how many equivalent units were calculated for the product that was completed
and for ending inventory?7)
Margaret sells hand-knit
scarves at a flea market. Each scarf sells for $25. Margaret pays $30 to rent a
vending space for one day. The variable costs are $15 per scarf. How many scarves
should she sell each day in order to break even?”