Question
The following beginning and ending inventory balances apply to XYZ's Year 1 accounting period: Beginning Ending Raw Materials Inventory $24,000 $22,000 Work in Process Inventory
The following beginning and ending inventory balances apply to XYZ's Year 1 accounting period:
Beginning | Ending | |
Raw Materials Inventory | $24,000 | $22,000 |
Work in Process Inventory | $32,000 | $33,000 |
Finished Goods Inventory | $20,000 | $17,000 |
During 2018, the company purchased $234,000 of direct raw materials. It incurred $180,000 of direct labor costs for the year and allocated $260,000 of manufacturing overhead costs to work in process. There was no overapplied or underapplied overhead. Revenue from goods sold during the year was $800,000.
The amount of cost of goods manufactured was
| a. | $675,000. |
| b. | $673,000. |
| c. | $679,000. |
| d. | $656,000 |
On Monday Mayfair Flowers purchased roses costing $20,000. Tuesday Mayfair uses $5,000 of the flowers to begin preparing for Friday evening's Lovers Dance. On Wednesday, they purchased office supplies on account for $3,000 and paid labor for projects of $1,500. Supplies were used on Thursday.
What are the ending account balances after Thursday's transactions?
| a. | Raw materials $20,000;Work-In-Process $0; Finished Goods $0; Cost of Goods Sold $4,500. |
| b. | Raw Materials $25,000;Work-In-Process $4,500; Finished Goods $0; Cost of Goods Sold $4,500. |
| c. | Raw Materials $15,000;Work-In-Process $6,500; Finished Goods $0; Cost of Goods Sold $0. |
| d. | Raw Materials $15,000;Work-In-Process $5,000; Finished Goods $0; Cost of Goods Sold $4,500. |
During Year 1 Smithtown Manufacturing expected to produce 100,000 units with $300,000 of overhead, $500,000 of material, and $200,000 in labor. Actual production was 110,000 units with an overhead cost of $280,000, $550,000 in materials used; and $220,000 in labor. All of the goods were completed and transferred to Finished Goods. What amount was transferred to Finished Goods? (HINT - calculate the POHR for overhead and apply overhead to the costs of transfer)
| a. | $1,000,000 |
| b. | $1,050,000 |
| c. | $1,070,000 |
| d. | $1,100,000 |
Information related to Broncos is listed below:
Units | Overhead | |
Budget | 80,000 | $350,000 |
Work in Process Inventory | 77,000 | $350,000 |
Actual | 75,000 | $360,000 |
What is the amount of underapplied overhead? (hint - calculate the POHR to calculate overhead applied)
| a. | $10,000 |
| b. | $21,875 |
| c. | $31,000 |
| d. | $31,875 |
Indirect costs are trouble for a manufacturing firm because
| a. | they cannot become assets until the finished goods are sold. |
| b. | they are directly related to direct costs. |
| c. | they cannot be estimated. |
| d. | many indirect costs will not be known until the end of the year. |
When a manufacturing firm sells its finished product
| a. | it reduces an asset and reduces the associated liability. |
| b. | they decrease an asset and increase an expense. |
| c. | it reduces equity and increases an asset. |
| d. | Sales and Administrative Costs become an expense. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Organizational Behavior Integrating Individuals Groups And Organizations
Authors: Joseph E. Champoux
4th Edition
0415804647, 9780415804646
