1. Consider the following budget information: materials to be used totals $64,750; direct labor

totals $198,400; factory overhead totals $394,800; work in process inventory January 1, 2012, was expected to be $189,100; and work in progress inventory on December 31, 2012, is expected to be $197,600. What is the budgeted cost of goods manufactured?

a. $649,450

b. $197,600

c. $657,950

d. $1,044,650

2. Direct material of $170,000 and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting.

a. $378,000

b. $305,000

c. $350,000

d. $288,000

3. The budgeted finished goods inventory and cost of goods sold for a manufacturing company for the year 2012 are as follows: January 1 finished goods, $765,000; December 31 finished goods, $640,000; cost of goods sold for the year, $2,560,000. The budgeted costs of goods manufactured for the year is?

a. $2,435,000

b. $2,560,000

c. $1,405,000

d. $3,965,000

4. Ruben Company purchased $100,000 of Evans Company bonds at 100. Ruben later sold the bonds at $104,500 plus $500 in accrued interest. The journal entry to record the sale of the bonds would be:

a. Debit: Cash $105,000; Credit: Investment in Bonds $100,000; Gain on Sale of Investments $4,500 and Interest Revenue $500

b. Debit: Cash $105,000; Credit: Investment in Bonds $100,000 and Gain on Sale of Investments $5,000

c. Debit: Cash $104,500 and Interest Receivable $500; Credit: Investment in Bonds $100,000, Gain on Sale of Investments $4,500 and Interest Revenue $500 (Answer)

d. Debit: Cash $105,000; Credit: Investment in Bonds $104,500 and Interest Revenue $500

5. At the beginning of the period, the Cutting Department budgeted direct labor of $155,000, direct material of $165,000 and fixed factory overhead of $15,000 for 9,000 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting.

a. $416,000

b. $335,000

c. $370,556

d. $368,889

6. Jacks Corporation purchases $200,000 bonds plus accrued interest for 2 months of $2,000 from Kennedy Company on March 1. The bonds have an annual interest rate of 6% payable on June 30 and December 31. The entry to record the purchase of the bonds would include:

a. Interest Receivable debit $2,000

b. Investment in Bonds debit $202,000

c. Interest Revenue credit $2,000

d. Cash credit $200,000

7. 100 plus accrued interest of $2,000. On June 30, 2011, Albert received its first semiannual interest. On February 1, 2011, Albert sold $40,000 of the bonds at 103 plus accrued interest. The journal entry Albert will record on April 1, 2011 for the purchase of the bonds will include:

a. A debit to Investments - Tetter Company for $50,000 (Answer).

b. A debit to Investments - Tetter Company for $52,000.

c. A credit for Cash of $50,000.

d. A credit to Interest Payable for $2,000.