BGN 5e Exam Questions - Chapter 1

1. The following data (in thousands of dollars) have been taken from the accounting records
of Oriole Corporation for the most recent year.

Finished goods inventory, beginning $ 480

Finished goods inventory, ending 640
Raw materials inventory, beginning 160
Raw materials inventory, ending 280
Work in process inventory, beginning 280
Work in process inventory, ending 200
Administrative expenses 600
Direct labor 800
Manufacturing overhead 920
Purchases of raw materials 480
Sales 3,960
Selling expenses 560

The cost of the raw materials used in production during the year (in thousands of dollars)
was:
A) $360.
B) $600.
C) $640.
D) $760.

Feedback – The correct answer is A:

Learning Objective 5 – Determine the cost of the raw materials used in production
during the year as follows:

Raw materials inventory, beginning $160

Purchases of raw materials 480
Less raw materials inventory, ending (280)
Raw materials used in production $360

2. The following data (in thousands of dollars) have been taken from the accounting records
of Oriole Corporation for the most recent year.

Finished goods inventory, beginning $ 480

Finished goods inventory, ending 640
Raw materials inventory, beginning 160
Raw materials inventory, ending 280
Work in process inventory, beginning 280
Work in process inventory, ending 200
Administrative expenses 600
 Direct labor 800
Manufacturing overhead 920
Purchases of raw materials 480
Sales 3,960
Selling expenses 560

The cost of goods manufactured for the year (in thousands of dollars) was:
A) $2,000.
B) $2,080.
C) $2,160.
D) $2,360.

Feedback – The correct answer is C:

Learning Objective 5 – Determine the cost of goods manufactured during the year as
follows:

Raw materials used in production $ 360

(calculated in the previous question)
Direct labor 800
Manufacturing overhead 920
Total manufacturing costs 2,080
Work in process inventory, beginning 280
2,360
Less: work in process inventory, ending (200)
Cost of goods manufactured $2,160

3. The following data (in thousands of dollars) have been taken from the accounting records
of Oriole Corporation for the most recent year.

Finished goods inventory, beginning $ 480

Finished goods inventory, ending 640
Raw materials inventory, beginning 160
Raw materials inventory, ending 280
Work in process inventory, beginning 280
Work in process inventory, ending 200
Administrative expenses 600
Direct labor 800
Manufacturing overhead 920
Purchases of raw materials 480
Sales 3,960
Selling expenses 560

The cost of goods sold for the year (in thousands of dollars) was:
A) $2,000.
 B) $2,320.
C) $2,640.
D) $2,800.

Feedback – The correct answer is A:

Learning Objective 4 – Determine the cost of goods sold for the year as follows:

Finished goods inventory, beginning $ 480

Cost of goods manufactured 2,160
(calculated in the previous question)
Less finished goods inventory, ending (640)
Cost of goods sold $2,000

4. The following data (in thousands of dollars) have been taken from the accounting records
of Oriole Corporation for the most recent year.

Finished goods inventory, beginning $ 480

Finished goods inventory, ending 640
Raw materials inventory, beginning 160
Raw materials inventory, ending 280
Work in process inventory, beginning 280
Work in process inventory, ending 200
Administrative expenses 600
Direct labor 800
Manufacturing overhead 920
Purchases of raw materials 480
Sales 3,960
Selling expenses 560

The net income for the year (in thousands of dollars) was:
A) $600.
B) $800.
C) $1,000.
D) $1,960.

Feedback – The correct answer is B:

Learning Objective 4 – Determine the net income for the year as follows:

Sales $3,960
Cost of goods sold 2,000
(calculated in the previous question)
Gross profit 1,960
Operating expenses:
 Administrative expenses $600
Selling expenses 560 (1,160)
Net income $ 800