Gullett Corporation had $26,000 of raw materials on hand on November 1.

During the month, the

company purchased an additional $75,000 of raw materials. The journal entry to record the purchase of
raw materials would include a:

A) debit to Raw Materials of $101,000

B) credit to Raw Materials of $75,000
C) debit to Raw Materials of $75,000
D) credit to Raw Materials of $101,000

Bottum Corporation, a manufacturing company, has provided data concerning its operations for May.
The beginning balance in the raw materials account was $20,000 and the ending balance was $36,000.
Raw materials purchases during the month totaled $63,000. Manufacturing overhead cost incurred
during the month was $111,000, of which $2,000 consisted of raw materials classified as indirect
materials. The direct materials cost for May was:

A) $63,000
B) $47,000
C) $79,000
D) $45,000

On January 1, Schaf Corporation had $23,000 of raw materials on hand. During the month, the company
purchased an additional $50,000 of raw materials. During January, $50,000 of raw materials were
requisitioned from the storeroom for use in production. These raw materials included both direct and
indirect materials. The indirect materials totaled $6,000. The journal entry to record the requisition from
the storeroom would include a:

A) debit to Work in Process of $50,000

B) debit to Raw Materials of $50,000
C) credit to Manufacturing Overhead of $6,000
D) debit to Work in Process of $44,000

Gallon Corporation had $24,000 of raw materials on hand on April 1. During the month, the company
purchased an additional $52,000 of raw materials. During April, $62,000 of raw materials were
requisitioned from the storeroom for use in production. These raw materials included both direct and
indirect materials. The indirect materials totaled $2,000. The debits to the Work in Process account as a
consequence of the raw materials transactions in April total:

A) $60,000
B) $62,000
C) $0
D) $52,000
During the month of July, direct labor cost totaled $12,000 and direct labor cost was 30% of prime cost.
If total manufacturing costs during July were $86,000, the manufacturing overhead was:

A) $46,000
B) $40,000
C) $28,000
D) $74,000

Shown below are a number of costs incurred last uear at Mecca Publishing Co., a manufacturer of
elementary school textbooks:

Solvents and ckeaners used by the custodian to clean

the textbook printing press ……………..……………..……………..……………..…………….. $500
Depreciation on the automobiles used by sales representatives……………….. $4,200
Fire insurance on factory building ……………..……………..……………..……………..… $2,000
Shipping costs on textbooks sold ……………..……………..……………..……………..…. $3,700

What is the total of the manufacturing overhead costs above?

A) $500
B) $2,500
C) $6,200
D) $6,700

In a job-order costing system, the incurrence of indirect labor costs would usually be recorded as a debit
to:
A) Manufacturing Overhead.
B) Finished Goods.
C) Work in Process.
D) Cost of Goods Sold.

At the beginning of June, Varetoni Manifacturing Company had a $320 balance in its Work in Process
inventory account. At the end of June, Varetoni’s Work in Process inventory account had a balance of
$970. During June, Varetoni made the following journal entries:

Finished Goods $6,160

Work in Process §6,160

Cost of Goods Sold $5,830

Finished Goods $5,830

Based on the information above, what is Varetoni’s cost of goods manufactured for June?

A) $5,180
B) $5,510
C) $6,160
In a normal costing system, the Manufacturing Overhead Control account:

A) is increased by allocated manufacturing overhead

B) is credited with amounts transferred to Work-in-Process
C) is decreased by allocated manufacturing overhead
D) is debited with actual overhead costs

Many firms use two overhead accounts: factory overhead control and factory overhead applied. During
the period, which account receives numerous debits and credits?

A) Factory overhead applied

B) Factory overhead control

Which of the following statements about manufacturing cost flows is false?

A) Direct materials, direct labor, and manufacturing overhead are entered in the Work-in-Process
Inventory account.
B) The Finished-Goods Inventory account will contain entries that reflect the cost of goods sold during
the period.
C) The cost of units sold during the period will typically appear on the income statement.
D) When a company sells goods that cost $54,000 for $60,000, the firm will enter $6,000 in an account
entitled Profit on Sale.

The Doris Company using the job order socting. At the beginning of May, two jibs were in process:

Job 769 Job 772

Materials 4,000 1,400
Direct labor 2,000 600
Applied factory overhead 3,000 900

There was no inventory of finished goods on May 1. During the month, Jobs 773, 774, 776, 778, and 779
were started.

Materials requisitions for May totaled 26,000, direct labor cost, 20,000 and actual factory overhead,
32,000. Factory overhead is applied at a rate of 150% of direct labor cost.

The only job still in process at the end of May is Job no. 779, with costs of 2,800 for materials and 1,800
for direct labor.

Job 776, the only finished job on hand at the end of May, has a total of 4,000.

Compute for the cost of goods manufactured, and cost of goods sold at normal:

A) (1) P 80,600 ; (2) P 78,600

B) (1) 76,600 ; (2) 78,600
C) (1) 80,600 ; (2) 76,600
In a job-order cost system, direct labor costs usually are recorded initially as an increase in:

A) Factory overhead applied

B) Factory overhead control
C) Finished goods control
D) Work-in process control

For product costing purposes, the cost of production overtime caused by equipment failure should be
classified as

A) Indirect Cost
B) Direct Cost
C) Period Cost
D) Expense

HSR Computer System designs and develops specialized software for companies and use a normal
costing system. The following data are available for the current year:

A) P 15.03
B) P 15.06
C) P 15.09
D) P 15.00

Samson Company uses a standard costing system in the production of its only product. The 84,000 units
of raw materials inventory were purchased for P126,000 and 4 units of raw materials are required to
produce one unit of final product. In October, the company produced 14,400 units of product. The
standard cost allowed for materials was P72,000, and there was an unfavorable usage variance of
P3,000. The materials price variance for the units used in October was

A) P15,000 unfavorable.
B) P15,000 favorable.
C) P3,000 unfavorable.
D) P3,000 favorable.
Cox Company's direct material costs for the month of January were as follows:

A)$3,360.
B)$3,375.
C)$3,400.

On June 1, Department A had 3,000 units 50% complete with respect to direct labor and factory
overhead; materials are added at the beginning of the process. During June, 15,000 units were started
into process in Department A. At the end of June, the ending goods in process of 4,000 units were 80%
complete with respect to direct labor and factory overhead. There was no normal and/or abnormal loss
of units in Department A during the month of June. The number of units transferred to Department B
were:

A) 16,700 units
B) 13,300 units
C) 14,000 units

Consider the following data of Department Z:

A) 20,200 units for materials and 20,280 units for conversion costs
B) 20,000 units for materials and 20,000 units for conversion costs
C) 21,000 units for materials and 20,600 units for conversion costs

The work in process inventory at the beginning of the period is 25% complete as to conversion cost.
Materials are added at the beginning of the process. If FIFO method is used, the equivalent units for
materials are equal to the:

A)beginning inventory
B) units started during the period plus 75% of the beginning inventory
C) units started during the period
A) 388,800 units
B) 518,400 units
C) 583,200 units
D) 972,000 units

A) P3,750,000
B) P2,850,000
C) P1,875,000
D) P2,500,000

A) $107,010
B) $109,440
C) $113,160
Transferred-in costs are treated as if they are:

A) conversion costs added at the beginning of the process

B) costs of beginning inventory added at the beginning of the process
C) direct labor costs added at the beginning of the process
D) a separate direct material added at the beginning of the process

A) 401,500 units
B) 350,000 units
C) 300,000 units
D) 292,500 units

Fixed costs remain constant at $200,000 per month. During high-output months variable costs are
$160,000, and during low-output months variable costs are $40,000. What are the respective high and
low indirect-cost rates if budgeted professional labor-hours are 8,000 for high-output months and 2,000
for low-output months?

A) $45.00 per hour; $120.00 per hour

B) $45.00 per hour; $45.00 per hour
C) $25.00 per hour; $20.00 per hour
D) $56.20 per hour; $120.00 per hour

All of the following increase (are debited to) the Work-in-Process Control account EXCEPT:

A) actual plant insurance costs

B) direct materials
C) allocated manufacturing overhead costs
Joni’s Kitty Supplies applies manufacturing overhead costs to products at a budgeted indirect-cost rate
of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the
Toy Mouse product. Estimates for this order include: Direct materials $40,000; 500 direct manufacturing
labor-hours at $20 per hour; and a 20% markup rate on total manufacturing costs. Estimated total
product costs for this special order equal:

A) $96,000
B) $50,000
C) $80,000
D) None of these answers is correct.

Gibson Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost
rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The
following estimates are provided for the coming year for the company and for the Winfield High School
band jacket job.

A) $2,310
B) $588
C) $1,680
D) $2,058

Using the data below, the ending balance of work-in-process inventory is:

A) $219,250
B) $73,250
C) $65,000
Schultz Company expects to manufacture and sell 30,000 baskets in 20X4 for $6 each. There are 3,000
baskets in beginning finished goods inventory with target ending inventory of 4,000 baskets. The
company keeps no work-in-process inventory. What amount of sales revenue will be reported on the
20X4 budgeted income statement?

A) $174,000
B) $180,000
C) $186,000
D) $204,000

Production budget

A) 4,400 mattresses
B) 5,600 mattresses

Kaiser’s Kraft Korner sells a single product. 7,000 units were sold resulting in $70,000 of sales revenue,
$28,000 of variable costs, and $12,000 of fixed costs. Breakeven point in units is:

A) 2,000 units

What is the breakeven point in units, assuming a product's selling price is $100, fixed costs are $8,000,
unit variable costs are $20, and operating income is $32,000?

A) 100 units

Ruben intends to sell his customers a special round-trip airline ticket package. He is able to purchase
the package from the airline carrier for $150 each. The round-trip tickets will be sold for $200 each and
the airline intends to reimburse Ruben for any unsold ticket packages. Fixed costs include $5,000 in
advertising costs. How many ticket packages will Ruben need to sell in order to achieve $60,000 of
operating income

A) 367 packages
B) 434 packages
C) 1,100 packages
D) 1,300 packages
For purposes of allocating joint costs to joint products using the relative sales value at split-off method,
the costs beyond split-off

A) are allocated in the same manner as the joint costs.

B) are deducted from the relative sales value at split-off.
C) are deducted from the sales value at the point of sale.
D) do not affect the allocation of the joint costs.

Love Co. manufactures products A and B from a joint process. Sales value at split-off was $700,000 for
10,000 units of A, and $300,000 for 15,000 units of B. Using the sales value at split-off approach, joint
costs properly allocated to A were $140,000. Total joint costs were

A) $98,000.
B) $200,000

A) $10,600 U
B) $11,080 U
C) $11,080 F
D) $10,480 U

A) $1,908 U
B) $2,430 U
Stench Foods Company uses a standard cost system to collect costs related to the productionof its garlic
flavored yogurt. The garlic (materials) standards for each container of yogurtproduced are 0.8 ounces of
crushed garlic at a standard cost of $2.30 per ounce.During the month of June, Stench purchased 75,000
ounces of crushed garlic at a total cost of$171,000. Stench used 64,000 of these ounces to produce
71,500 containers of yogurt. What is Stench's materials price variance for the month of June?

A) $1,500 favorable
B) $15,640 unfavorable
C) $17,250 favorable
D) $23,800 favorable

Gonzalez Company uses the equation $520,000 + $2 per direct labor hour to budget manufacturing
overhead. Gonzalez has budgeted 150,000 direct labor hours for the year. Actual results were 150,000
direct labor hours and $817,500 total manufacturing overhead. The total overhead applied for the year
is
A) $300,000.
B) $520,000.
C) $817,500.
D) $820,000.

Scooter Corp had no beginning inventories, finished 40,000 units, and sold 36,000 units. There were no
ending inventories of materials or work in process. Materials purchased and used were $225,000; direct
labor and overhead were $170,000. Cost of goods sold would be valued at
*
A) $39,500.
B) $355,500

Stench Foods Company uses a standard cost system to collect costs related to the productionof its garlic
flavored yogurt. The garlic (materials) standards for each container of yogurtproduced are 0.8 ounces of
crushed garlic at a standard cost of $2.30 per ounce.During the month of June, Stench purchased 75,000
ounces of crushed garlic at a total cost of$171,000. Stench used 64,000 of these ounces to produce
71,500 containers of yogurt. What is Stench's materials price quantity for the month of June?
A) $1,500 favorable
B) $15,640 unfavorable

Gallon Corporation had $24,000 of raw materials on hand on April 1. During the month, the company
purchased an additional $52,000 of raw materials. During April, $62,000 of raw materials were
requisitioned from the storeroom for use in production. These raw materials included both direct and
indirect materials. The indirect materials totaled $2,000. The debits to the Work in Process account as a
consequence of the raw materials transactions in April total

A) 60,000
Douglas Corporation recently produced and sold 100,000 units. Fixed costs at this level of activity
amounted to P 50,000; variable costs were P 100,000. How much cost would the company anticipate if
during the next period it produced and sold 102,000 units
A) P 150,000
B) P 151,000
C) P 152,000
D) P 153,000

A) P 947
B) P 954
C) P 959

JVC Company has three jobs outstanding. The company uses normal costing and the overhead rate
which is based on machine hours amounts to P 96 per machine hour based on a forecast of 4,000 hours.
Job 1 with a direct cost of P 94,300 has used 1,290 machine hours. Job 2 with a direct cost of P 74,700
has used 1,760 machine hours. Job 3 with a direct cost of P 87,470 has used 789 hours. Actual overhead
amounted to P 375,000. Job 1 is completed and sold for P 276,500. Job 2 is completed and not yet
delivered. Job 3 is still in process. Job 2's total cost amounts to

A) P163,214
B) P 218,140
C) P 243,660

A) P 50,000
B) P 55,000
C) P 78,000
D) P 82,000