6. Train Company had no beginning inventory and adds all materials at the very beginning of its only process. Assume 88,000 units were started, and 65% complete at month's end. Total costs were $95,000 for material and $136,000 for conversion. The cost per equivalent unit of conversion is ______.

a. $4.42

b. $2.38

c. $1.55

d. None of these

e. $4.04

7. Train Company had no beginning inventory and adds all materials at the very beginning of its only process. Assume 27,700 units were started, and 12,000 units completed. Ending work in process is 70% complete. The cost per equivalent unit of conversion is ______.

a. 10,990

b. 16,710

c. 19,390

d. 22,990

e. None of these

8. Train Company makes widgets, and each unit requires 4 pounds of material at $5 per pound. 600 and 800 units will be built in March and April, respectively. Train keeps material on hand at 25% of the next months production needs. How much is the total materials cost for March?

a. $4,000

b. $7,250

c. 650

d. None of these

e. $3,250

9. Anticipated unit sales for January are 5,400; sales for February are 4,900; and sales for March are 5,200. Finished goods are consistently maintained at 70% of the following months sales. If units cost $15 each to produce, how much is Februarys total cost of production?

a. None of these

b. $4,900

c. 74,400

d. $75,750

e. 76,650

10. Total production of 1,000 units of finished goods required 4,250 actual hours at $14.70 per hour. The standard is 4.2 hours per unit of finished goods, at a standard rate of $15.00 per hour. Which of the following statements is true?

a. The labor rate variance is $1,275 favorable.

b. The labor rate variance is $3,910 unfavorable.

c. None of these

d. The labor efficiency variance is $750 favorable.

e. The total labor variance $525 unfavorable.

11. If beginning work in progress was 850 units, 1,100 additional units were put into production, and ending work in process was 675 units, how many units were completed?

a. 1,275

b. 675

c. 1,950

d. 1,600

e. None of these

12. Train Company had no beginning inventory and adds all materials at the very beginning of its only process. Assume 27,700 units were started, and 12,000 units completed. Ending work in process is 70% complete. The cost per equivalent unit of material is _____.

a. 10,990

b. 15,700

c. None of these

d. 22,990

e. 27,700

13. Assume that actual overhead consisted of $37,000 for indirect labor, $26,000 for indirect material, and $18,000 for depreciation of factory equipment. Based on the preset rates, $79,900 of overhead was applied to work in process. Which of the following statements is true?

a. Overhead is underapplied

b. This is viewed as an unfavorable situation

c. All of these

d. None of these

14. The contract interest rate for bonds ______.

a. Will fluctuate over the life of a bond

b. Has no relation to the cash flow associated with a particular bond.

c. None of these

d. Must equal the effective interest rate

e. Is less than the effective interest rate when bonds are issued at a premium

15. Train corporation issued $500,000 of 8%, 15-year bonds on April 1, 2017 at 102 interest is paid on April 1 and October 1. The proper entry to record issuance of the bonds includes a debit to Cash for _____.

a. 102,000

b. 490,000

c. 500,000

d. 40,000

e. 510,000

16. Which of the following statements about treasury stock is true?

a. Gains are not recorded on treasury stock transactions but losses are.

b. Purchasing treasury stock requires a debit to the treasury stock account.

c. Losses on treasury stock transactions are recorded in income.

d. Excess of the sales price over cost should be credited to retained earnings.

e. Purchasing treasury stock causes stockholders equity to increase.

17. Train Company has 200,000 shares of common stock issued and 20,000 shares of treasury stock. On April 15, the board declared a $.55 dividend to be paid to stockholders of record on May 4. The dividend was distributed on May 15. The proper journal entry for Train Company on May 15 does not include ______.

a. A credit to Cash for $110,000

b. None of these

c. A Debit to Dividends Payable for $110,000

d. A Debit to Dividends for $110,000

e. Both a debit to Dividends Payable for $110,000 and a Credit to Cash for $110,000

18. In an effort to concentrate its resources in more profitable areas, Train Corporation recently sold its family cookbook segment but retained its restaurant segment. The disposal constitutes _______.

a. None of these

b. An item which does not require disclosure

c. An extraordinary item

d. A discontinued operation, which should not be disclosed net-of-tax effects

e. A discontinued operation, which should be treated as a prior period adjustment

19. Train Corporation has 800,000, 5%, $100 par preferred shares outstanding. The preferred stock was originally issued at 102.5 The current dividend has been fully paid. Total stockholders stock equity is $22,750,000. The common stock equity is _____.

a. $22,750,000

b. 14,550,000

c. 14,800,000

d. 8,200,000

e. None of these

20. Train Companys balance sheet included cash of $4,275,839, accounts receivable of $14,283,289 inventories of $9,847,240 prepaid expenses of $1,987,008, land of $55,000,000 accounts payable of $8,764,512 and accrued expenses of $7,124,572. Working capital is ______.

a. $14,504,292

b. $30,393,376

c. None of these

d. $69,504,292

e. $15,889,084

21. Selected information for 2017 is:

cost of goods sold, $28,200,000

2016 ending inventory, $3,400,000

2017 ending inventory, $3,650,000

net sales, $70,520,000.

Assuming a 360-day year, what was the inventory turnover ratio for 2017?

a. 45

b. None of these

c. 8

d. 8.29

e. 7.73

22. On the schedule of cost of goods manufactured:

a. Cost of goods manufactured equals value of total manufactured equals value of total manufacturing costs

b. None of these

c. Factory overhead plus beginning work-in-progress equals manufacturing costs

d. Ending work-in-process will necessarily increase if total manufacturing costs increase

e. Beginning work-in-process plus direct materials used equals manufacturing costs

23. Which costing method seems ideally suited to the production of homogenous products in continuous throughout?

a. Job order costing

b. None of these

c. Absorption costing

d. Process costing

e. Activity-based cost

24. Train Company uses a job order cost system and applies overhead based on estimated rates for work in their factory. The overhead application rate is based on total estimated overhead costs of $2,587,500 and direct labor hours of 57,500. For job 836, direct labor hours were 1,420 for the month of December. What is the appropriate journal entry for job 836 for the month of December?

a. Factory Overhead should be credited for $63,450

b. Job Overhead Expense should be debited for $5,950

c. None of these

d. Job Overhead Expense should be credited for $2,587,500

e. Factory Overhead should be credited for $57,500

25. For job 1838, there were 1,000 direct labor hours, and actual overhead was $500 for depreciation and $1,400 for indirect labor. Overhead is applied at $2 per direct labor hour. Which account should be debited for $2,000?

a. Cost of Goods Manufactured

b. None of these

c. Factory Overhead

d. Work in Progress

e. Cost of goods Sold