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Managerial Accounting Unit Test 01(SuB17) 1. At an activity level of 4,000 machine-hours in a month, Franklin, Inc.’s total variable production engineering cost is
\$154,200 and its total fixed production engineering cost is
\$129,000. What would be the total production engineering cost
per unit, both fixed and variable, at an activity level of
4,300 machine-hours in a month? Assume that this level of
activity is within the relevant range.
a. \$68.33
b. \$68.55
c. \$70.80
d. \$65.86 2. The following costs were incurred in April: Direct materials
Direct labor
Selling expenses
\$24,000
\$14,000
\$18,000
\$18,000 Prime costs during the month totaled:
a. \$53,000
b. \$67,000
c. \$38,000
d. \$103,000 3. Snake Bite Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single
product.
Production volume
Direct materials
Direct labor
\$44,200
\$37,300
\$48,500 2,000 units
\$88,400
\$74,600
\$62,200 The best estimate of the total monthly fixed manufacturing cost is:
a. \$130,000
b. \$177,600
c. \$34,800
d. \$225,200 4. Given the cost formula, Y = \$7,000 + \$1.80X, total cost for an activity level of 4,000 units would be:
a. \$7,000
b. \$200
c. \$7,200
d. \$14,200 5. Maintenance costs at a Wet Glaze Corporation factory are listed below: Machine-Hours
March
3,135
April
3,095
May
3,133
June
3,157
July
3,065
August
3,076
September
3,084
October
3,125
November
3,098 Maintenance Cost
\$48,340
\$47,993
\$48,345
\$48,548
\$47,733
\$47,830
\$47,880
\$48,247
\$48,014 Management believes that maintenance cost is a mixed cost that depends on
machine-hours. Use the high-low method to estimate the variable and fixed
components of this cost. Compute the variable component first and round off to the
nearest whole cent. Compute the fixed component second and round off to the
nearest whole dollar. These estimates would be closest to:
a. \$8.86 per machine-hour; \$20,577 per month
b. \$0.11 per machine-hour; \$48,192 per month
c. \$15.48 per machine-hour; \$48,103 per month
d. \$8.81 per machine-hour; \$20,718 per month 6. Very Bigly Company bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently
completed year, the Corporation estimated the machine-hours for the upcoming year
at 10,000 machine-hours. The estimated variable manufacturing overhead was
\$6.82 per machine-hour and the estimated total fixed manufacturing overhead was
\$230,200. The predetermined overhead rate for the recently completed year was
closest to:
a. \$29.84 per machine-hour
b. \$23.15 per machine-hour
c. \$23.02 per machine-hour
d. \$6.82 per machine-hour 7. Smitty Inc., applies manufacturing overhead to jobs on the basis of direct laborhours. The following information relates to Smitty Inc., for last year: What was Brusveen’s underapplied or overapplied overhead for last year?
a. \$4,000 underapplied
b. \$8,880 underapplied
c. \$8,880 overapplied
d. \$9,000 underapplied 8. The following data have been recorded for recently completed Job 323 on its job cost sheet. Direct materials cost was \$2,260. A total of 37 direct labor-hours and 141
machine-hours were worked on the job. The direct labor wage rate is \$13 per laborhour. The Corporation applies manufacturing overhead on the basis of machinehours. The predetermined overhead rate is \$14 per machine-hour. The total cost for
the job on its job cost sheet would be:
a. \$3,259
b. \$2,741
c. \$4,715
d. \$2,287 9. Warila Inc. has provided the following data for the month of September. There were no beginning inventories; consequently, the direct materials, direct labor, and
manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was underapplied by \$3,000.
The Corporation allocates any underapplied or overapplied manufacturing overhead
among work in process, finished goods, and cost of goods sold at the end of the
month on the basis of the manufacturing overhead applied during the month in those
accounts.
The work in process inventory at the end of September after allocation of any
underapplied or overapplied manufacturing overhead for the month is closest to:
a. \$23,509
b. \$23,111
c. \$23,070
d. \$23,550 10. Small Thinking Corp., has provided the following data concerning manufacturing overhead for January: The Corporation’s Cost of Goods Sold was \$223,000 prior to closing out its
Manufacturing Overhead account. The Corporation closes out its Manufacturing
Overhead account to Cost of Goods Sold. Which of the following statements is true?
a. Manufacturing overhead for the month was overapplied by \$5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is
\$228,000
b. Manufacturing overhead for the month was underapplied by \$5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is
\$218,000
c. Manufacturing overhead for the month was underapplied by \$5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is
\$228,000
d. Manufacturing overhead for the month was overapplied by \$5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is
\$218,000
11. There are two acceptable methods for closing out any balance of underapplied or overapplied manufacturing overhead. One method involves allocation of the
balance among several accounts, whereas the other closes any balance directly to:
a. Finished Goods inventory.
b. Cost of Goods Sold.
c. Cost of Goods Manufactured.
d. Work in Process inventory. 12. Thompson Corporation uses the weighted-average method in its process costing system. The Molding Department is the second department in its production
process. The data below summarize the department’s operations in January. The Molding Department’s cost per equivalent unit for conversion cost for January
was \$5.37.
How much conversion cost was assigned to the ending work in process inventory in
the Molding Department for January?
a. \$4,081.20
b. \$10,203.00
c. \$10,310.40
d. \$6,121.80 13. In February, one of the processing departments at Manger Corporation had beginning work in process inventory of \$25,000 and ending work in process
inventory of \$34,000. During the month, \$290,000 of costs were added to production
and the cost of units transferred out from the department was \$281,000. In the
department’s cost reconciliation report for February, the total cost to be accounted
for under the weighted-average method would be:
a. \$59,000
b. \$605,000
c. \$630,000
d. \$315,000 14. Siloam Springs Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service
departments, Telecommunications and Administration, and two operating
departments, Surgery and Recovery. Telecommunications Department costs are allocated on the basis of the number of
telecommunications ports in departments and Administration Department costs are
allocated on the basis of employees. The total Surgery Department cost after service
department allocations is closest to:
a. \$481,336
b. \$484,059
c. \$473,169
d. \$478,133 15. Doctor’s High Priced Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments,
Personnel and Information Technology (IT), and two operating departments, Family
Medicine and Pediatrics. Data concerning those departments follow: Personnel costs are allocated first on the basis of employees and IT costs are
allocated second on the basis of PCs. The total Pediatrics Department cost after
allocations is closest to:
a. \$231,638
b. \$223,132
c. \$232,286
d. \$182,936