Professional Documents
Culture Documents
Wednesday Class
SPRING 2014
ANSWERS IN RED
Please keep this document to review your exam preparations.
Note; For each multiple choice question more than one answer could
be right please indicate ALL answer that are right!
Each multiple choice question is 3 points (60 points in total)
Each open question is 20 points (total 40 points)
1) The WIP account had an ending balance of $ 5,700 on February 28,
during February the cost of direct materials was $ 30,000 and direct
labor applied to production was
$ 15,100.. If the cost of
Finished goods was $ 45,100 and the beginning balance on the WIP
account was $ 1,200 the applied overhead in the period for units
take into production must have been:
A) $ 4,500
2) Manufacturing overhead costs would include:
A) Depreciation on Manufacturing equipment
B) Cleaning materials used for the production machines
3) The accounting records of a company show the following details at
31 December ;
DECEMBER 31
JANUARY 1
(ending)
(beginning)
Inventory WIP
$ 10,000
$ 10,000
Inventory Finished
$ 50,000
$ 60,000
Goods
Direct Materials used
$ 220,000
Direct labor
$ 130,000
Manufacturing
$ 100,000
Overhead
Selling expenses
$ 100,000
Which of the following statements is correct?
A) Amount debited to WIP Inventory during the year was $ 450,000
B) Cost of Finished goods manufactured was $ 450,000
C) Cost of goods sold was $ 460,000
D) Total manufacturing cost for the year was $ 500,000
4) The following company/business is most likely process industry
where we apply process costing:
a) China Mobile
b) A Cell Phone Factory
c) A Paper Mill
d) A shoe factory
5) The way we determine the cost of manufacturing and the value of
the WIP (Work In Process) at the end of a period under job order
costing is by:
a) Job Cost Cards
6) The following relationship(s) is/are true: (WIP=Work in Process)
a) Wip end of period- Wip beginning of period = Taken into
Production- Finished goods
7) Fixed Costs are:
a) Costs that are the same per period within a certain range
of output of a company
8) Indirect costs are:
a) Costs that are indirectly related to a product and thus not
easy to identify
9) The following statement(s) is/are true:
a) Most variable costs are direct costs but not all variable
costs
10)
13) Which of the following would be the most appropriate basis for
allocating the cost of plant insurance covering the risk of damage
on factory process control (automation and networks-IT)
a) Machine hours per job
14)
Using ABC to allocate manufacturing overhead can help
managers to:
a) Identify what activities drive what costs
b) Locate inefficiencies in the production process
15)
16)
17)
18)
19)
20)
Open Question 1)
Process Costing (20 points)
Make a Process Cost sheet for the company producing Magnum ice
creams below; show clearly the equivalent units the unit costs and the
Cost of Manufacturing Finished Goods and the value of the WIP at the
end of January 2008. The company uses FIFO !
ANSWER
e)
ANSWER