ALL MC

#1

Black Thumb Inc. manufactures gardening equipment. For April there were no beginning inventories of direct materials, and no beginning or ending work-in-process. Journal entries are recorded when materials are purchased and the sale of finished goods. Black Thumb Inc. uses backflush costing. Variances are written off against Cost of Goods Sold. The following data pertains to April:

Conversion costs April	$275,000
Direct materials purchased April	$525,000
Units produced April	88,000
Units sold April	80,000
Direct materials variance	$10,000 Favourable
Conversion cost variance	$15,000 Unfavourable

Which of the following journal entries properly records the conversion costs written off to Cost of Goods Sold?

A.

Conversion Costs Allocated	260,000
Cost of Goods Sold	15,000
Conversion Costs Control	275,000

B.

WorkinProcess Control	275,000
Conversion Costs Control	275,000

C.

Cost of Goods Sold	275,000
Conversion Costs Control	275,000

D.

Conversion Costs Control	275,000
Conversion Costs Allocated	260,000
Cost of Goods Sold	15,000

E.

Conversion Costs Control	275,000
Conversion Costs Allocated

#2

#2.1

If Ms. Frost wanted a long-term commitment for supplying this product, what price would most likely be quoted to her?

A.$1,290 B.$1,100 C. $1,410 D.$1,400 E.$1,175

Frozen Fridges is approached by Ms. Frost, a new customer, to fulfill a large one-time-only special order for a fridge similar to one offered to regular customers. Frozen Fridges has excess capacity. The following per unit data apply for sales to regular customers: Direct materials Direct manufacturing labour Variable manufacturing support Fixed manufacturing support Total manufacturing costs Markup (20%) Estimated selling price For Frozen Fridges, what is the minimum acceptable price of this one-time-only special order? $850 150 100 75 1,175 235 $1,410 O A. $1,000 B. $1,100 C. $1,175 OD. $1,290 O E. $1,410