estion Chapters 18-25 Multiple choice (5 pts each) (highlight or c

05 Jun estion Chapters 18-25 Multiple choice (5 pts each) (highlight or c

Question
Chapters 18-25

Multiple choice (5 pts each) (highlight or clearly mark your answer)
Which of the following is an example of direct labor cost in a factory?

Wages of assembly line personnel

Salary of vice president of production

Wages of factory security guard

Salary of production manager

Which of the following is true of product costs?

They are expensed in the period they are paid.

For external reporting, GAAP requires that they be expensed before the products are sold.

They are first recorded in an inventory account.

For merchandising companies, product costs do not include freight costs.

Which of the following is true of absorption costing?

the variable manufacturing costs are considered period costs

the fixed manufacturing costs are considered period costs

both variable and fixed manufacturing costs are considered product costs

both variable and fixed manufacturing costs are considered period costs

Which of the following would use a process costing system rather than a job order costing system?

a health-care provider

a music production studio

a paint manufacturer

a home remodeling contractor

The procurement manager was able to bring down the cost of direct materials by purchasing materials of a slightly lower grade quality than the company had used previously. The lower grade of materials, however, meant a higher defect rate on the assembly line, and higher wastage of materials during production, which in turn lowered operating income. This situation would have led to a(n):

favorable direct materials cost variance.

unfavorable direct labor cost variance.

unfavorable direct labor efficiency variance.

favorable direct materials efficiency variance.

Which of the following is an example of a labor cost standard?

$40 per direct labor hour

50 square feet per unit

$0.95 per square foot

0.5 direct labor hours per unit

Problems (10 pts each) (please show your work for partial credit)
Amoeba Manufacturing Company provided the following information for the year 2015:

Purchases—Raw Materials

$90,000

Plant Utilities & Insurance

67,500

Indirect Materials

11,750

Indirect Labor

4,750

Direct Materials Used in Production

96,000

Direct Labor

117,500

Depreciation on Factory Plant & Equipment

6,000

Cost of Goods Manufactured

290,850

Cost of Goods Sold

304,550

The inventory account balances as of January 1st 2015 are given below.

Raw Materials Inventory

$42,000

Work-in-Process Inventory

12,000

Finished Goods Inventory

49,500

What is the ending balance in the finished goods inventory?

The following information was obtained from Fizz Company:

Advertising Costs

$9,900

Indirect Labor

11,000

CEO’s Salary

49,000

Direct Labor

41,000

Indirect Materials

7,900

Direct Materials Used

61,000

Factory Utilities

700

Factory Janitorial Costs

2,300

Manufacturing Equipment Depreciation

2,100

Delivery Vehicle Depreciation

1,100

Administrative Wages and Salaries

21,000

How much were Fizz’s period costs?

Samson Inc. reported the following information for the year 2015:

Service Revenue

$40,000

Operating Expenses

$23,625

Net Income

$16,375

Number of Services Provided for the Year

10,500

How much was the unit cost per service?

Muses Manufacturing produces plastic toys and uses process costing. There are three processing departments—Assembling, Finishing, and Packaging. On January 1, 2012, the Finishing Department had 2,000 units of partially processed product in production. During January, 32,000 units were transferred in from the Assembling Department and 29,000 units were completed and transferred out. At the end of the month, there were 5,000 units of partially processed products remaining in the Finishing Department. See additional details below.

Finishing Department, ending balance at January 31, 2012

Percentage completion for materials cost:

90%

Percentage completion for conversion cost:

75%

For the Finishing Department, what was the number of equivalent units for the month of January, with respect to direct materials?

Antique Works is owned and operated by a craftsman who makes replicas of historic firearms for museums, sportsmen, and collectors. The cost data are as follows:

Price per unit

$720

Variable costs per unit

470

Fixed costs per month

8,000

If Antique expects to sell 40 units per month, what is his margin of safety expressed in units per month?

Jame Company sells glass vases at a wholesale price of $3 per unit. The variable cost of manufacture is $1.75 per unit. The fixed costs are $7,500 per month. Jame sold 5,500 units during this month. Calculate Jame’s operating income (loss) for this month.

Wood Designs Company, a custom cabinet manufacturing company, is setting standard costs for one of its products. The main material is cedar wood, sold by the square foot. The current cost of cedar wood is $4.00 per square foot from the supplier. Delivery costs are $0.25 per board foot. Carpenters’ wages are $25.00 per hour. Payroll costs are $3.60 per hour and benefits are $5.00 per hour. How much is the direct materials cost standard (per square foot)?