All of the following items are debited to the Work-in-Process Inventory account except:

a. Cost of the completed goods being transferred out of the plant.

b. Direct labor cost consumed/incurred.

c. Applied factory overhead cost.

d. Direct materials cost consumed/used.

6) Montreal Industries Inc. had the following activities during the year:

Direct materials:

Beginning inventory $50,000

Purchases 154,000

Ending inventory 26,000

Direct manufacturing labour 40,000

Manufacturing overhead 30,000

Ending work-in-process inventory 10,000

Beginning work-in-process inventory 2,000

Ending finished goods inventory 40,000

Beginning finished goods inventory 60,000

What is Montreal's cost of direct materials used during the year?

a. $128,000

b. $24,000

c. $204,000

d. $218,000

e. $178,000

7) Montreal Industries Inc. had the following activities during the year:

Direct materials:

Beginning inventory $50,000

Purchases 154,000

Ending inventory 26,000

Direct manufacturing labour 40,000

Manufacturing overhead 30,000

Ending work-in-process inventory 10,000

Beginning work-in-process inventory 2,000

Ending finished goods inventory 40,000

Beginning finished goods inventory 60,000

What is Montreal's cost of goods manufactured during the year?

a. $240,000

b. $260,000

c. $268,000

d. $238,000

e. $248,000

8) Montreal Industries Inc. had the following activities during the year:

Direct materials:

Beginning inventory $50,000

Purchases 154,000

Ending inventory 26,000

Direct manufacturing labour 40,000

Manufacturing overhead 30,000

Ending work-in-process inventory 10,000

Beginning work-in-process inventory 2,000

Ending finished goods inventory 40,000

Beginning finished goods inventory 60,000

What is Montreal's cost of goods SOLD during the year?

a. $220,000

b. $232,000

c. $200,000

d. $240,000

e. $260,000

Give an example of how a manager can increase variable costs while decreasing fixed costs.

a. Hiring a subcontractor to do repairs on an annual retainer basis rather than on a per-visit basis

b. Subcontracting a component to a supplier on a per-unit basis to avoid purchasing a machine with a high fixed amortization cost

c. Changing a sales force compensation plan from a percent of sales dollars to a fixed salary

d. None of the above

10) Contribution margin is the amount of revenue remaining after deducting

a. contra-revenue.

b. cost of goods sold.

c. fixed costs.

d. variable costs.

11) When completed units are transferred to the warehouse:

a. Finished Goods Inventory account is credited.

b. Cost of Goods Manufactured account is debited.

c. Finished Goods Inventory account is debited.

d. Work-in-Process Inventory account is debited.

e. Cost of Goods Sold account is debited.

12) In regard to selling activities, which one of the following would not be a cost driver for selling expense?

a. Number of invoices.

b. Number of sales calls.

c. Number of production runs.

d. Number of shipments.

13) Which of the following is an assumption of CVP analysis?

a. Costs must be separated into separate fixed and variable components.

b. Given revenue mixed of products is dynamic

c. The time value of money must be taken into account.

d. There will be a change between beginning and ending levels of inventory.

e. Total revenues and total costs are curvilinear in relation to output units.