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Exam 16: Cost Concepts and Cost Allocation

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Question 81

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Yamishi Production had the following inventories for the first quarter of 20xx: $\begin{array}{lrr}&\text { Beginning } &\text { Ending }\\ \text { Materials } & \$ 606,600 & \$ 522,100 \\\text { Work in process } & 312,100 & 280,800 \\\text { Finished goods } & 416,100 & 540,200\end{array}$ Purchases of materials during the quarter were $427,800.Total direct labor costs were incurred in the amount of $1,482,000.Actual overhead costs were incurred as follows: operating supplies used,$17,100; janitorial and maintenance,$87,300; employee benefits,$26,400; utilities,$162,000; depreciation of factory,$43,200; property taxes,$24,000; factory insurance,$29,000.Net sales for the quarter were $3,562,200.Selling and administrative expenses were $508,000.Income taxes should be computed at 40 percent. Prepare a statement of cost of goods manufactured for the first quarter of 20xx.

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Question 82

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The amount for cost of goods manufactured should be the same as the amount transferred from the Work in Process Inventory account to the Finished Goods Inventory account during the year.

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Question 83

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A cost driver is a cost pool that increases with activity.

Product costs for a manufacturing company consist of direct materials,direct labor,and overhead.

A manufacturing company applies overhead based on direct labor hours.At the beginning of the year,it estimated that overhead costs would be $720,000 and direct labor hours would be 90,000.Actual overhead costs incurred were $754,400,and actual direct labor hours were 92,000.The entry to assign overhead costs during the year would be

Consider the following information: direct materials used totaled $134,400; direct labor amounted to $396,800; overhead was computed to be $789,600; Work in Process Inventory on January 1,2010,was $378,200; and Work in Process Inventory on December 31,2010,was $385,200.What was the cost of goods manufactured?

In which one of the following accounts would all three product costs not be found?

Overhead costs decrease the Work in Process Inventory account.

Prime costs consist of

A predetermined overhead rate times the amount of activity basis equals the overhead cost assigned to the product.

Another term for product cost is

Recorded costs for the DC5 Division,which manufactured 6,000 units of Product DC5 during the month,are as follows: $\begin{array} { l r } \text { Direct materials } & \$ 458,000 \\\text { Direct labor } & 400,000 \\\text { Indirect production costs } & 80,000 \\\text { Supervisary services } & \underline{ 40,000} \\\text { Total } &\underline{ \$ 978,000}\end{array}$ The per-unit cost of manufacturing Product DC5 this month is

Actual overhead plus overapplied overhead equals applied overhead.

Cost of Goods Sold is decreased for underapplied overhead.

Period costs are consumed entirely in the current reporting period.

In a manufacturing environment,costs of materials initially flow

Completed but unsold units for a manufacturing firm would be included in which of the following accounts?

Fill in the missing data for Company B: $\begin{array}{|l|c|}\hline &\text { Company B }\\\hline \text { Direct materials used } & \$ 9,000 \\\hline \text { Direct labor cost } & 4,000 \\\hline \text { Overhead } & \text { (a) } \\\hline \text { Total manufacturing costs } & 25,000\\\hline \text { Work in process inventory, Jan. } 1 & 1,000 \\\hline \text { Work in process inventory, Dec. } 31 & 3,500 \\\hline \text { Sales revenue } & 40,000\\\hline \text { Finished goods inventory, Jan. } 1 & \text { (b) } \\\hline \text { Cost of goods manufactured } & \text { (c) } \\\hline \text { Cost of goods available for sale } & \text { (d) } \\ \hline \text { Finished goods inventory, Dec. } 31 & 4,000 \\\hline \text { Cost of goods sold } & 26,500 \\\hline \text { Gross margin } & \text { (e) } \\\hline \text { Operating expenses } & \text { (f) } \\ \hline\text { Net operating income }&5,500\\ \hline\end{array}$

All manufacturing costs that are assigned to completed (but unsold) products should be classified as

Which of the following is a source document for materials?