Q1 The accounting records of Turner Industries, a manufacturer of flash drives, shows the following costs for the year ended December 31, 2011.

Direct materials$700,000Direct labour220,000Indirect materials100,000Indirect labour135,000Variable overhead220,000Fixed overhead325,000Variable selling costs100,000Fixed S&A costs185,000

The amount of prime costs incurred in 2011 were

Select one:

a.$920,000

b.$1,240,000

c.$765,000

d.$1,140,000

Q2 Ariana Corp. makes pencils.The actual and budgeted overhead for the year was $350,000.The company produced 5,000,000 pencils during the year and sold 4,760,000 pencils.The cost per batch of 1,000 pencils is as follows:

Direct materials$20Direct labour$10Variable overhead$5

What is the cost per batch of pencils if variable costing is used?

Select one:

a.$45

b.$109

c.$105

d.$35

Q3 Andy's Office Warehouse makes office chairs.The following information was reported for year ended 2011.

Total sales$2,300,000Direct materials$20 per chairDirect labour$25 per chairVariable overhead$18 per chairFixed overhead$665,000Selling and admin. costs$124,000Total production19,000Sales18,400

The operating profit for 2011 using absorption costing would be

Select one:

a.$314,000

b.$372,800

c.$351,800

d.$360,800

Q4 Use the following costs per unit to identify the total product cost and conversion cost per unit:

$ per unitDirect materials12Indirect materials6Direct labour24Indirect labour8Other variable overhead costs10Variable selling expense5Fixed production overhead12Fixed S&A expense8

Select one:

a.Product cost: $46; Conversion cost: $34

b.Product cost: $58; Conversion cost: $34

c.Product cost: $46; Conversion cost: $46

d.Product cost: $72; Conversion cost: $54