QUESTIONS 1. Which of the following items would least likely be classified as part of direct materials for an automobile manufacturer? a. Steel b. Paint C. Tires d. Screws 2. Janitorial supplies used in a factory's restrooms is an example of Direct Material Product Cost Yes NO Yes Yes ji u o Yes No Direct materials are sometimes referred to as a. overhead. b. raw materials. C. period costs. d. administrative expenses. 4. Period costs are associated with a. the ordering materials for production. b. producing products. C. the administration of the business. d. general factory overhead. 5. Which of the following accounts is not reported on the Balance Sheet? a. Cost of Goods Sold b. Raw Materials c. Work in Process d. Finished Goods 6. Raw Materials Inventory increases when a. materials are purchased. b. materials are used. c. materials are transferred to Work in Process Inventory. d. goods are sold. 7. Finished Goods Inventory decreases by a. cost of goods manufactured. b. overhead applied. c. the cost of selling the product. d. the cost of goods sold. 8. Mounce's Chocolate Delight's bakery had $2,000 of raw materials in inventory at the beginning of the month. During the month Mounce used $45,000 of materials and had $1,500 in ending inventory. How much inventory did the bakery purchase during the month? a. $44,500 b. $45,000 C. $45,500 d. $48,500 9. Basil Industries reported the following information for December: Beginning balance, Raw Materials Inventory $ 187,500 Beginning balance, Work in Process Inventory 300,000 Beginning balance, Finished Goods Inventory 106,250 Manufacturing overhead applied 525,000 Purchases of raw materials 337,500 Factory electricity 62,500 Direct labor payroll 200,000 Depreciation on factory equipment 218,750 Insurance on factory building 50,000 Indirect materials used in production 43,750 Total raw materials used in production 406,250 Indirect labor payroll 150,000 Cost of goods manufactured 1,250,000 Cost of Goods Sold 1,312,500 What was the total manufacturing cost for Basil for December? a. $1,062,500 b. $1,087,500 C. $1,131,250 d. $1,250,000 10. At the beginning of the year, managers at King Industries estimated $420,000 in manufacturing overhead, 20,000 direct labor hours and 50.000 machine hours. Actual manufacturing costs at the end of the year were $425,000 in manufacturing overhead. During the year 22,000 direct labor hours and 47,000 machine hours were incurred. If overhead is applied based on direct labor hours, what is the predetermined overhead rate for the coming year? a. $19.09 per direct labor hour b. $20.00 per direct labor hour C. $21.00 per direct labor hour d. $21.25 per direct labor hour
