Note:

Answer Questions (p) and (q) using the following selected data for March, taken from Ryker Companys financial statements:

Cost of goods available for sale 61,000

Manufacturing overhead 25,000

Cost of goods manufactured 51,000

Finished goods inventory ending 10,000

Direct materials used 20,000

Sales 115,000

Selling and administrative expenses 30,000

Direct labour 15,000

Work-in-progress inventory beginning 8,000

p. What was the gross margin for March?

1) 20,000

2) 34,000

3) 50,000

4) 64,000

q. What was the work-in-progress inventory at the end of March?

1) 0

2) 9,000

3) 17,000

4) 60,000

r. Done and Bradsweet, LLC, is a professional accounting services company. In 2019, the firm incurred $76,000 in promotion expenses. Of this, $61,000 was for activities related to entertaining potential clients and included charges for hotel stays and transportation for clients and management to corporate head office to promote the firm and its services. Some, but not all, of these clients subsequently engaged the services of the company during the year. The remaining $15,000 was spent on advertising the firm in print and television media in Europe.

Which of the following statements is correct?

1) $76,000 represents a period cost.

2) $76,000 represents a product cost.

3) $61,000 is a product cost and $15,000 is a period cost.

4) $61,000 is a direct cost and $15,000 is an indirect cost.

Note:

Answer Questions (s) and (t) using the following data from the Bonnie Company for the month of November 2019:

Inventories 11/1/2019 11/30/2019

Raw materials 19,000 ?

Work in progress 12,000 14,000

Finished goods ? 9,000

Additional data:

Sales revenue 106,000

Direct labour costs 10,000

Manufacturing overhead costs 11,000

Selling expenses 12,000

Administrative expenses 18,000

s. If the cost of raw materials purchased in November was 14,000 and the cost of goods manufactured was 40,000, what was the inventory of raw materials on November 30?

1) 12,000

2) 14,000

3) 16,000

4) 19,000

t. If the cost of goods manufactured for November was 40,000 and net income was 41,000, what was the finished goods inventory on November 1?

1) 1,000

2) 4,000

3) 32,000

4) 35,000