Managerial Accounting Test

TEST QUESTIONS:

Questions 1-3 refer to the following:

The following selected data for March were taken from Rubenstein

Company's financial statements:

Cost of goods available for sale Manufacturing overhead

Cost of goods manufactured

Finished goods inventory ‑ ending

Direct materials used

Sales

Selling and administrative expenses

Direct labor

Work in process inventory ‑ beginning

$ 65,000

20,000

51,000

10,000

15,000

105,000

30,000

20,000

0

1. The gross margin was:

1. $55,000.

2. $54,000.

3. $50,000.

4. $40,000.

2. The beginning finished goods inventory was:

1. $24,000.

2. $ 9,000.

3. $10,000.

4. $14,000.

3. The ending work in process inventory was:

1. $ 4,000.

2. $ 8,000.

3. $10,000.

4. $0.

4. Farber Company uses a job order cost system. The information below is from the financial records of the company for last year:

Total manufacturing costs $2,500,000

Cost of goods manufactured $2,425,000

Predetermined overhead rate 80% of direct labor cost

Applied overhead was 30% of total manufacturing costs. The Work in Process inventory at January 1 was 75% of the Work in Process inventory at December 31.

Farber Company's total direct labor cost was:

1. $750,000.

2. $600,000.

3. $900,000.

4. $937,500.

5. Dukes Company used a predetermined overhead rate this year of $2 per direct labor hour, based on an estimate of 20,000 direct labor hours to be worked during the year. Actual costs and activity during the year were:

Actual manufacturing overhead cost incurred $38,000

Actual direct labor hours worked 18,500

The under‑ or overapplied overhead for the year was:

1. $1,000 underapplied.

2. $1,000 overapplied.

3. $3,000 underapplied.

4. $3,000 overapplied.

6. Krumbly Company uses the FIFO method in its process costing system. At the beginning of the month, Department D's work in process inventory contained 2,000 units. These units were fully complete with respect to materials and 40% complete with respect to conversion costs, with a total cost at that point of $3,600. During the month, conversion costs amounted to $8 per equivalent unit of production. If all 2,000 units are fully complete by the end of the month, their total cost by that time will be:

1. $19,600.

2. $10,000.

3. $13,200.

4. $9,000.

7. Details of the manufacturing activity in Amy Company's Assembly Department for the month of December are given below:

Number

of Units

Labor and Overhead

Percent Complete

Work in process inventory, Dec. 1

Started in assembly during the month

Work in process inventory, Dec. 31

10,000

80,000

15,000

70%

40%

All materials are added at the beginning of processing in the Assembly Department.

The equivalent units of production for labor and overhead for the month, using the FIFO method, are:

1. 90,000.

2. 70,000.

3. 80,000.

4. 74,000.

8. Lap Company uses the weighted‑average method in its process costing system. The beginning inventory in a particular department consisted of 80,000 units, 100% complete with respect to materials and 25% complete with respect to conversion costs. The total dollar value of this inventory was $226,000. During the month, 150,000 units were transferred out of the department. The costs per equivalent unit of production for the month were $2.00 for materials and $3.50 for conversion costs. The value of the units completed and transferred out of the department was:

1. $681,000.

2. $765,000.

3. $821,000.

4. $825,000.

9. Robin Company uses activity‑based costing to compute product costs for external reports.