Question 1

What are three reasons that overhead must be allocated to products?

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Question 2

Define relevant range and explain its significance.

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Question 3

Long Enterprises  Refer to Long Enterprises. For March, conversion cost incurred was
A) $30,000.
B) $40,000.
C) $70,000.
D) $72,000.

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Question 4

Long Enterprises  Refer to Long Enterprises. For March, Cost of Goods Manufactured was
A) $118,000.
B) $115,000.
C) $112,000.
D) $109,000.

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Question 5

List and explain three types of quality costs.

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Question 6

Given the following information for Graves Corporation, prepare the necessary journal entries, assuming that the Raw Material Inventory account contains both direct and indirect material.
 a.$\quad $ Purchased raw material on account $ \$ 28,500 $.
b.$\quad $Put material into production: $ \$ 15,000 $ of direct material and $ \$ 3,000 $ of indirect material. 
c.$\quad $Accrued payroll of $ \$ 90,000 $, of which 70 percent was direct and the remainder was indirect. 
d.$\quad $Incurred and paid other overhead items of $ \$ 36,000 $. 
e.$\quad $Transferred items costing $ \$ 86,500 $ to finished goods. 
f.$\quad $Sold goods costing $ \$ 71,300 $ on account for $ \$ 124,700 $.

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Question 7

From the following information for the Seabrook Company, compute prime costs and conversion costs.
 $\begin{array}{ll}
\underline{\text {Inventries}}&\underline{\text { Beginning }} &\underline{ \text { Ending }} \
\text {Raw Material}&\$ 9,900 & \$ 7,600 \
\text {Wotk in Process}&44,500 &37,800\
\text { Finished Goods }&36,580 & 61,300
\end{array}$ 
 Raw material purchased during the period cost $40,800; overhead incurred and paid or accrued for the period was $21,750; and 23,600 direct labor hours were incurred at a rate of $13.75 per hour.

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Question 8

The following information is for the Cameron Manufacturing Company for November.
 $\begin{array}{lll}
\underline{\text { Inventories} }&\underline{\text { Beginting} } &\underline{\text { Ending }}\
\text { Raw Material } & \$ 17,400 & \$ 13,200 \
\text { Work in Process } & 31,150 & 28,975 \
\text { Finished Goods } & 19,200 & 25,500
\end{array}$
  Calculate total manufacturing costs, cost of goods manufactured, and cost of goods sold.

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Question 9

Define a variable cost and a fixed cost. What causes changes in these costs? Give two examples of each.

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Question 10

Long Enterprises  Refer to Long Enterprises. For March, prime cost incurred was
A) $75,000.
B) $69,000.
C) $45,000.
D) $39,000.

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Question 11

What is the difference between a product cost and a period cost? Give three examples of each. What is the difference between a direct cost and indirect cost? Give two examples of each.

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Question 12

Prepare a Schedule of Cost of Goods Manufactured (in good form) for the Chandler Company from the following information for June 20X8:
 $\begin{array}{ll}
\underline{\text {Inventries}}&\underline{\text { Beginning }} &\underline{ \text { Ending }} \
\text {Raw Material}&\$6,700 & \$ 8,900 \
\text {Wotk in Process}&17,700& 22,650 \
\text { Finished Goods }&29,730 & 19,990
\end{array}$

Additional information: purchases of raw material were $46,700; 19,700 direct labor hours were worked at $11.30 per hour; overhead costs were $33,300.

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Question 13

Why should predetermined overhead rates be used?

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Question 14

The following miscellaneous data has been collected for a manufacturing company for the most recent year-end:
  Required: Prepare a cost of goods manufactured statement showing how all unknown amounts were determined.

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Quiz 1: Cost Terminology and Cost Behaviors

What are three reasons that overhead must be allocated to products?

Define relevant range and explain its significance.

Long Enterprises Refer to Long Enterprises. For March, conversion cost incurred was

Long Enterprises Refer to Long Enterprises. For March, Cost of Goods Manufactured was

List and explain three types of quality costs.

Define a variable cost and a fixed cost. What causes changes in these costs? Give two examples of each.

Long Enterprises Refer to Long Enterprises. For March, prime cost incurred was

What is the difference between a product cost and a period cost? Give three examples of each. What is the difference between a direct cost and indirect cost? Give two examples of each.

Why should predetermined overhead rates be used?

The following miscellaneous data has been collected for a manufacturing company for the most recent year-end: Required: Prepare a cost of goods manufactured statement showing how all unknown amounts were determined.