Question 1.1.(TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Larop Corporation for the just-completed year.



Purchases of raw materials


Direct labor


Manufacturing overhead


Administrative expenses


Selling expenses


Raw materials inventory, beginning


Raw materials inventory, ending


Work-in-process inventory, beginning


Work-in-process inventory, ending


Finished goods inventory, beginning


Finished goods inventory, ending


Prepare a Schedule of Cost of Goods Manufactured statement in the text box below. (Points : 15)

Question 2.2.(TCO B) The Florida Company manufactures a product that goes through three processing departments. Information relating to activity in the first department during June is given below.

Percentage Completed




Work in process, June 1




Work in process, Jun 30




The department started 650,000 units into production during the month and transferred 680,000 completed units to the next department.

Required: Compute the equivalent units of production for the first department for June, assuming that the company uses the weighted-average method of accounting for units and costs. (Points : 20)

Question 3.3.(TCO C) A tile manufacturer has supplied the following data.

Boxes of tile produced and sold


Sales revenue


Variable manufacturing expense


Fixed manufacturing expense


Variable selling and admin expense


Fixed selling and admin expense


Net operating income


Calculate the company’s unit contribution margin.
Calculate the company’s contribution margin ratio.
If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company’s net operating income be? (Points : 25)

Question 4.4.(TCO D) Johnson Company, which has only one product, has provided the following data concerning its most recent month of operations.

Selling price


Units in beginning inventory


Units produced


Units sold


Units in ending Inventory


Variable costs per unit:

Direct materials


Direct labor


Variable manufacturing overhead


Variable selling and admin


Fixed costs:

Fixed manufacturing overhead


Fixed selling and admin


What is the unit product cost for the month under variable costing?
What is the unit product cost for the month under absorption costing?
Prepare an income statement for the month using the variable costing method.
Prepare an income statement for the month using the absorption costing method. (Points : 30)