1.

A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $250,000, and the following quantities of product and sales revenues were produced.

Product	Pounds		Price per Pound
Feed	100,000		$	0.90
Flour	50,000			2.20
Starch	20,000			1.00

How much of the $250,000 cost should be allocated to feed if the value basis is used? (Round your intermediate percentage to the nearest whole percent.)

Multiple Choice

• $0.

• $133,333.

• $250,000.

• $130,000.

• $102,500.

2.

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

Office Expenses	Total				Allocation Basis
Salaries	$	50,000			Number of employees
Depreciation		34,000			Cost of goods sold
Advertising		68,000			Net sales

Item	Drilling			Grinding			Total
Number of employees		1,800			2,700			4,500
Net sales	$	388,000		$	582,000		$	970,000
Cost of goods sold	$	140,600		$	229,400		$	370,000

The amount of the total office expenses that should be allocated to Drilling for the current period is:

Multiple Choice

• $60,120.

• $90,600.

• $105,200.

• $152,000.

• $600,000.

3.

Use the following data to find the total direct labor cost variance if the company produced 3,500 units during the period.

Direct labor standard (4.00 hrs. @ $6.70/hr.)	$	26.80	per unit
Actual hours worked		12,300
Actual rate per hour	$	7.30

Multiple Choice

• $12,300 favorable.

• $8,400 favorable.

• $4,010 unfavorable.

• $8,400 unfavorable.

• $4,010 favorable.