The cost of handling materials in a manufacturing company is an example of a(n):

Period cost

Direct material cost

Indirect material cost.

None

2- The salary paid to the CEO of Alaskan Company would be classified on the income statement as a(n):

Administrative expense

Direct labor cost

Manufacturing overhead cost.

Selling expense

3- Prime cost consists of:

Direct labor and manufacturing overhead

Direct materials and manufacturing overhead.

Direct materials and direct labor.

Direct materials, direct labor and manufacturing overhead.

4- Product costs are all except:

Property taxes on factory equipment.

Depreciation on factory machinery.

Salaries of the salesmen.

Wages of machine operators

5- Fixed costs per unit

Will increase with increases in activity.

Will decrease with increases in activity.

Are not affected by activity.

Should be ignored in making decisions since they cannot change

Question (2):

The following information had been gathered for the year ended December 2019 from Rjfn manufacturing company:

Units produced.......................................10,000

Units sold.............................................9,400

Beg. WIP .............................................$10,000

End. WIP.............................................$2,000

Beg. Finished Goods ..............................$92,000

End. Finished Goods ..............................$200,000

Sales price per unit ....................................$60

Direct materials per unit ..............................$ 8

Direct labor per unit ....................................$ 9

Variable manufacturing overhead per unit ...... $ 3

Total fixed manufacturing overhead ............ $ 400,000

Variable selling and administrative cost ......$ 20,000

Fixed selling and administrative cost .........$ 15,000

Required: Prepare income statement using VARIABLE method.

Question (3):

The Cutright Company has a small factory with two service departments, Power and Maintenance, and two producing departments, Cutting and Assembly.

The Power Department cost is allocated on the basis of kilowatt hours, and the Maintenance Department cost is allocated on the basis of maintenance hours.The following information is available:

Power

Maintenance

Cutting

Assembly

Departmental cost before allocations

$100,000

$40,000

$200,000

$160,000

Kilowatt hours

50

200

600

200

Maintenance hours

20

30

150

100

Required: Using the Direct Method and Step Method, allocate the costs of the service departments to the 2 operating departments.

Question (4):

BMGInc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Work in process, beginning:

Units in process ........................................................... 200

Stage of completion with respect to materials ............ 60%

Stage of completion with respect to conversion.......... 20%

Costs in the beginning inventory:

Materials cost ........................................................... $756

Conversion cost ........................................................ $1,508

Units started into production during the month .............. 18,000

Units completed and transferred out .............................. 17,700

Costs added to production during the month:

Materials cost .............................................................. $116,569

Conversion cost ........................................................... $675,432

Work in process, ending:

Units in process ........................................................... 500

Stage of completion with respect to materials ............ 70%

Stage of completion with respect to conversion.......... 80%

Required:

Prepare a production report for the department using the weighted-average method.