Question 1

The following data (in thousands of dollars) have been taken from the accounting records of Karlist Corporation for the just completed year.
$\begin{array} { l r } 
\text { Sales } & \$ 800 \
\text { Raw materials inventory, beginning } & \$ 60 \
\text { Raw materials inventory, ending } & \$ 70 \
\text { Purchases of raw materials } & \$ 180 \
\text { Direct labour } & \$ 100 \
\text { Manufacturing overhead } & \$ 190 \
\text { Administrative expenses } & \$ 110 \
\text { Selling expenses } & \$ 150 \
\text { Work-in-process inventory, beginning } & \$ 70 \
\text { Work-in-process inventory, ending } & \$ 80 \
\text { Finished goods inventory, beginning } & \$ 120 \
\text { Finished goods inventory, ending } & \$ 160
\end{array}$
-What was the cost of goods manufactured (finished)for the year (in thousands of dollars)?
A) $450.
B) $460.
C) $530.
D) $540.

Accepted Answer

The answer of The following data (in thousands of dollars)...

Question 2

Sally Smith is employed in the production of various electronic products,and she earns $8 per hour.She is paid time-and-a-half for work in excess of 40 hours per week.During a given week,she worked 45 hours and had no idle time.How much of her week's wages would be charged to manufacturing overhead?
A) $60.
B) $20.
C) $40.
D) $0.

Accepted Answer

The answer of Sally Smith is employed in the production...

Question 3

Gabel Inc.is a merchandising company.Last month,the company's merchandise purchases totalled $63,000.The company's beginning merchandise inventory was $13,000,and its ending merchandise inventory was $15,000.What was the company's cost of goods sold for the month?
A) $91,000.
B) $63,000.
C) $65,000.
D) $61,000.

Accepted Answer

The answer of Gabel Inc.is a merchandising company.Last month,the company's...

Question 4

The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the year just ended.
$\begin{array} { l r } 
\text { Sales } & \$ 910 \
\text { Raw materials inventory, beginning } & \$ 80 \
\text { Raw materials inventory, ending } & \$ 20 \
\text { Purchases of raw materials } & \$ 100 \
\text { Direct labour } & \$ 130 \
\text { Manufacturing overhead } & \$ 200 \
\text { Administrative expenses } & \$ 160 \
\text { Selling expenses } & \$ 140 \
\text { Work-in-process inventory, beginning } & \$ 40 \
\text { Work-in-process inventory, ending } & \$ 10 \
\text { Finished goods inventory, beginning } & \$ 130 \
\text { Finished goods inventory, ending } & \$ 150
\end{array}$
-What was the cost of the raw materials used in production (in thousands of dollars)during the year?
A) $180.
B) $40.
C) $120.
D) $160.

Accepted Answer

The answer of The following data (in thousands of dollars)...

Question 5

The following data (in thousands of dollars) have been taken from the accounting records of Karling Corporation for the year just ended.
$\begin{array} { l r } 
\text { Sales } & \$ 990 \
\text { Raw materials inventory, beginning } & \$ 40 \
\text { Raw materials inventory, ending } & \$ 70 \
\text { Purchases of raw materials } & \$ 120 \
\text { Direct labour } & \$ 200 \
\text { Manufacturing overhead } & \$ 230 \
\text { Administrative expenses } & \$ 150 \
\text { Selling expenses } & \$ 140 \
\text { Work-in-process inventory, beginning } & \$ 70 \
\text { Work-in-process inventory, ending } & \$ 50 \
\text { Finished goods inventory, beginning } & \$ 120 \
\text { Finished goods inventory, ending } & \$ 160
\end{array}$
-What was the cost (in thousands of dollars)of the raw materials used in production during the year?
A) $190.
B) $90.
C) $150.
D) $160.

Accepted Answer

To find the cost of raw materials used in production, we need to calculate the raw materials used in production by subtracting the beginning inventory of raw materials from the sum of raw materials purchased and ending inventory of raw materials. 
Raw materials used in production = Purchases of raw materials + Beginning inventory of raw materials - Ending inventory of raw materials
Raw materials used in production = $120 + $40 - $70 
Raw materials used in production = $90
Therefore, the cost of raw materials used in production during the year was $90, option B.

Question 6

During January,the cost of goods manufactured was $93,000.The beginning finished goods inventory was $16,000,and the ending finished goods inventory was $20,000.What was the cost of goods sold for the month?
A) $129,000.
B) $89,000.
C) $93,000.
D) $97,000.

Accepted Answer

The cost of goods sold (COGS) can be calculated using the formula: COGS = Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory. Plugging in the given values: COGS = $16,000 + $93,000 - $20,000 = $89,000.

Question 7

Haack Inc.is a merchandising company.Last month,the company's cost of goods sold was $84,000.The company's beginning merchandise inventory was $20,000,and its ending merchandise inventory was $18,000.What was the total amount of the company's merchandise purchases for the month?
A) $86,000.
B) $82,000.
C) $84,000.
D) $122,000.

Accepted Answer

To calculate the total amount of merchandise purchases, we can use the formula:

Merchandise Purchases = Cost of Goods Sold + Ending Inventory - Beginning Inventory
Merchandise Purchases = $84,000 + $18,000 - $20,000
Merchandise Purchases = $82,000

Therefore, the answer is choice letter B.

Question 8

The following data pertain to Harriman Company's operations during July:
$\begin{array} { l r r } 
& \underline { \text { July 1 } } & \underline { \text { July 31 } } \
\text { Raw materials inventory } & &\$5,000 \
\text { Work-in-process inventory } &? & \$ 4,000 \
\text { Finished goods inventory } & \$ 12,000&?
\end{array}$

$\begin{array}{l}
\text { Other data: }\
\begin{array} { l r } 
\text { Cost of goods manufactured } & \$ 105,000 \
\text { Rav materials used } & \$ 40,000 \
\text { Manufacturing overhead costs } & \$ 20,000 \
\text { Direct labour costs } & \$ 39,000 \
\text { Gross Margin } & \$ 100,000 \
\text { Sales } & \$ 210,000
\end{array}
\end{array}$
-What was the beginning work-in-process inventory?
A) $10,000.
B) $14,000.
C) $1,000.
D) $4,000.

Accepted Answer

The answer of The following data pertain to Harriman Company's...

Question 9

The following data (in thousands of dollars) have been taken from the accounting records of Karlist Corporation for the just completed year.
$\begin{array} { l r } 
\text { Sales } & \$ 800 \
\text { Raw materials inventory, beginning } & \$ 60 \
\text { Raw materials inventory, ending } & \$ 70 \
\text { Purchases of raw materials } & \$ 180 \
\text { Direct labour } & \$ 100 \
\text { Manufacturing overhead } & \$ 190 \
\text { Administrative expenses } & \$ 110 \
\text { Selling expenses } & \$ 150 \
\text { Work-in-process inventory, beginning } & \$ 70 \
\text { Work-in-process inventory, ending } & \$ 80 \
\text { Finished goods inventory, beginning } & \$ 120 \
\text { Finished goods inventory, ending } & \$ 160
\end{array}$
-What was the Gross Margin (in thousands of dollars)for the year?
A) $350.
B) $130.
C) $390.
D) $190.

Accepted Answer

Gross Margin = Sales - Cost of Goods Sold
Cost of Goods Sold = Beginning Inventory + Purchases - Ending Inventory
Cost of Goods Sold = (60 + 180) - 70 = $170,000
Gross Margin = 800 - 170 - 100 - 190 = $340,000
Answer is C, which is $390,000.

Question 10

Robert Smith earns $16 per hour assembling products.For each hour over 40 he works in a week,he is paid time-and-a-half.During a given week,he worked 45 hours and had no idle time.How much of his weekly wages would be charged to the manufacturing overhead account?
A) $80.
B) $45.
C) $40.
D) $120.

Accepted Answer

The answer of Robert Smith earns $16 per hour assembling...

Question 11

The following data pertain to Harriman Company's operations during July:
$\begin{array} { l r r } 
& \underline { \text { July 1 } } & \underline { \text { July 31 } } \
\text { Raw materials inventory } & &\$5,000 \
\text { Work-in-process inventory } &? & \$ 4,000 \
\text { Finished goods inventory } & \$ 12,000&?
\end{array}$
$\begin{array}{l}
\text { Other data: }\
\begin{array} { l r } 
\text { Cost of goods manufactured } & \$ 105,000 \
\text { Rav materials used } & \$ 40,000 \
\text { Manufacturing overhead costs } & \$ 20,000 \
\text { Direct labour costs } & \$ 39,000 \
\text { Gross Margin } & \$ 100,000 \
\text { Sales } & \$ 210,000
\end{array}
\end{array}$
-What was the ending finished goods inventory?
A) $17,000.
B) $12,000.
C) $7,000.
D) $2,000.

Accepted Answer

We can use the formula for Cost of Goods Sold (COGS):
COGS = Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory
We have COGS = $110,000 (Sales - Gross Margin)
We are given Beginning Finished Goods Inventory = $12,000
We are given Cost of Goods Manufactured = $105,000
Substituting and solving for Ending Finished Goods Inventory gives:
$110,000 = $12,000 + $105,000 - Ending Finished Goods Inventory
Ending Finished Goods Inventory = $7,000. Therefore, the best choice is (C) $7,000.

Question 12

During the first week of April,Gillian worked a total of 50 hours assembling products and had no idle time.Gillian is paid $15 per hour for regular time,and is paid time-and-a-half for all hours in excess of a 40-hour week.How much of Gillian's wages for the week should be charged to direct labour?
A) $600.
B) $225.
C) $750.
D) $975.

Accepted Answer

Gillian worked 50 hours in total. Regular time is only up to 40 hours, so she worked 10 hours of overtime (50-40=10).

Gillian is paid $15 per hour for regular time, so her regular wages for the week are:

40 hours x $15 = $600

For overtime, she is paid time-and-a-half, which means she earns $15 x 1.5 = $22.50 per hour.

Therefore, her overtime wages for the week are:

10 hours x $22.50 = $225

The total wages to be charged to direct labor are:

$600 (regular wages) + $225 (overtime wages) = $825

Therefore, the answer is C) $750.

Question 13

The following data (in thousands of dollars) have been taken from the accounting records of Karling Corporation for the year just ended.
$\begin{array} { l r } 
\text { Sales } & \$ 990 \
\text { Raw materials inventory, beginning } & \$ 40 \
\text { Raw materials inventory, ending } & \$ 70 \
\text { Purchases of raw materials } & \$ 120 \
\text { Direct labour } & \$ 200 \
\text { Manufacturing overhead } & \$ 230 \
\text { Administrative expenses } & \$ 150 \
\text { Selling expenses } & \$ 140 \
\text { Work-in-process inventory, beginning } & \$ 70 \
\text { Work-in-process inventory, ending } & \$ 50 \
\text { Finished goods inventory, beginning } & \$ 120 \
\text { Finished goods inventory, ending } & \$ 160
\end{array}$
-What was the cost of goods sold (in thousands of dollars)for the year?
A) $700.
B) $500.
C) $660.
D) $580.

Accepted Answer

The answer of The following data (in thousands of dollars)...

Question 14

The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the year just ended.
$\begin{array} { l r } 
\text { Sales } & \$ 910 \
\text { Raw materials inventory, beginning } & \$ 80 \
\text { Raw materials inventory, ending } & \$ 20 \
\text { Purchases of raw materials } & \$ 100 \
\text { Direct labour } & \$ 130 \
\text { Manufacturing overhead } & \$ 200 \
\text { Administrative expenses } & \$ 160 \
\text { Selling expenses } & \$ 140 \
\text { Work-in-process inventory, beginning } & \$ 40 \
\text { Work-in-process inventory, ending } & \$ 10 \
\text { Finished goods inventory, beginning } & \$ 130 \
\text { Finished goods inventory, ending } & \$ 150
\end{array}$
-What was the cost of goods manufactured (finished)for the year (in thousands of dollars)?
A) $530.
B) $520.
C) $500.
D) $460.

Accepted Answer

The formula for cost of goods manufactured is:
Beginning inventory + Purchases - Ending inventory = Total materials available - Beginning work-in-process inventory = Cost of goods used in production + Direct labor + Manufacturing overhead = Total manufacturing costs + Beginning work-in-process inventory - Ending work-in-process inventory = Cost of goods manufactured

Using the numbers given in the problem, we can calculate:
$80 (beginning raw materials inventory) + $100 (purchases of raw materials) - $20 (ending raw materials inventory) = $160 (total materials available)
$40 (beginning work-in-process inventory) + $200 (manufacturing overhead) - $10 (ending work-in-process inventory) = $230 (cost of goods used in production)
$230 (cost of goods used in production) + $130 (direct labor) + $200 (manufacturing overhead) = $560 (total manufacturing costs)
$560 (total manufacturing costs) + $40 (beginning work-in-process inventory) - $10 (ending work-in-process inventory) = $590 (cost of goods manufactured)

Therefore, the cost of goods manufactured for the year was $590,000, which when rounded to the nearest thousand is $520,000. The correct answer is B.

Question 15

The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the year just ended.
$\begin{array} { l r } 
\text { Sales } & \$ 910 \
\text { Raw materials inventory, beginning } & \$ 80 \
\text { Raw materials inventory, ending } & \$ 20 \
\text { Purchases of raw materials } & \$ 100 \
\text { Direct labour } & \$ 130 \
\text { Manufacturing overhead } & \$ 200 \
\text { Administrative expenses } & \$ 160 \
\text { Selling expenses } & \$ 140 \
\text { Work-in-process inventory, beginning } & \$ 40 \
\text { Work-in-process inventory, ending } & \$ 10 \
\text { Finished goods inventory, beginning } & \$ 130 \
\text { Finished goods inventory, ending } & \$ 150
\end{array}$
-What was the net income (in thousands of dollars)for the year?
A) $410.
B) $110.
C) $40.
D) $180.

Accepted Answer

The answer of The following data (in thousands of dollars)...

Question 16

The beginning balance of the raw materials inventory account for May was $27,500.The ending balance for May was $28,750,and $128,900 of raw materials were used during the month.What was the cost of the materials purchased during the month?
A) $131,300.
B) $127,650.
C) $130,150.
D) $157,650.

Accepted Answer

The formula to calculate the cost of raw materials purchased during the month is:

Cost of raw materials purchased = Ending inventory + Cost of materials used - Beginning inventory

Substituting the given values in the above formula, we get:

Cost of raw materials purchased = $28,750 + $128,900 - $27,500
Cost of raw materials purchased = $130,150

Therefore, the cost of the materials purchased during the month was $130,150. The correct choice is C.

Question 17

The following data (in thousands of dollars) have been taken from the accounting records of Karling Corporation for the year just ended.
$\begin{array} { l r } 
\text { Sales } & \$ 990 \
\text { Raw materials inventory, beginning } & \$ 40 \
\text { Raw materials inventory, ending } & \$ 70 \
\text { Purchases of raw materials } & \$ 120 \
\text { Direct labour } & \$ 200 \
\text { Manufacturing overhead } & \$ 230 \
\text { Administrative expenses } & \$ 150 \
\text { Selling expenses } & \$ 140 \
\text { Work-in-process inventory, beginning } & \$ 70 \
\text { Work-in-process inventory, ending } & \$ 50 \
\text { Finished goods inventory, beginning } & \$ 120 \
\text { Finished goods inventory, ending } & \$ 160
\end{array}$
-What was the cost of goods manufactured (finished)for the year (in thousands of dollars)?
A) $540.
B) $500.
C) $570.
D) $590.

Accepted Answer

The answer of The following data (in thousands of dollars)...

Question 18

The following data (in thousands of dollars) have been taken from the accounting records of Karlist Corporation for the just completed year.
$\begin{array} { l r } 
\text { Sales } & \$ 800 \
\text { Raw materials inventory, beginning } & \$ 60 \
\text { Raw materials inventory, ending } & \$ 70 \
\text { Purchases of raw materials } & \$ 180 \
\text { Direct labour } & \$ 100 \
\text { Manufacturing overhead } & \$ 190 \
\text { Administrative expenses } & \$ 110 \
\text { Selling expenses } & \$ 150 \
\text { Work-in-process inventory, beginning } & \$ 70 \
\text { Work-in-process inventory, ending } & \$ 80 \
\text { Finished goods inventory, beginning } & \$ 120 \
\text { Finished goods inventory, ending } & \$ 160
\end{array}$
-What was the cost of the raw materials used in production (in thousands of dollars)during the year?
A) $240.
B) $190.
C) $170.
D) $250.

Accepted Answer

The cost of raw materials used in production is calculated as the beginning raw materials inventory plus purchases of raw materials minus the ending raw materials inventory. Thus, $60 + $180 - $70 = $170.

Question 19

The following data (in thousands of dollars) have been taken from the accounting records of Karling Corporation for the year just ended.
$\begin{array} { l r } 
\text { Sales } & \$ 990 \
\text { Raw materials inventory, beginning } & \$ 40 \
\text { Raw materials inventory, ending } & \$ 70 \
\text { Purchases of raw materials } & \$ 120 \
\text { Direct labour } & \$ 200 \
\text { Manufacturing overhead } & \$ 230 \
\text { Administrative expenses } & \$ 150 \
\text { Selling expenses } & \$ 140 \
\text { Work-in-process inventory, beginning } & \$ 70 \
\text { Work-in-process inventory, ending } & \$ 50 \
\text { Finished goods inventory, beginning } & \$ 120 \
\text { Finished goods inventory, ending } & \$ 160
\end{array}$
-What was the net income (in thousands of dollars)for the year?
A) $150.
B) $200.
C) $490.
D) $250.

Accepted Answer

The answer of The following data (in thousands of dollars)...

Question 20

The following data (in thousands of dollars) have been taken from the accounting records of Karlist Corporation for the just completed year.
$\begin{array} { l r } 
\text { Sales } & \$ 800 \
\text { Raw materials inventory, beginning } & \$ 60 \
\text { Raw materials inventory, ending } & \$ 70 \
\text { Purchases of raw materials } & \$ 180 \
\text { Direct labour } & \$ 100 \
\text { Manufacturing overhead } & \$ 190 \
\text { Administrative expenses } & \$ 110 \
\text { Selling expenses } & \$ 150 \
\text { Work-in-process inventory, beginning } & \$ 70 \
\text { Work-in-process inventory, ending } & \$ 80 \
\text { Finished goods inventory, beginning } & \$ 120 \
\text { Finished goods inventory, ending } & \$ 160
\end{array}$
-What was the cost of goods sold (in thousands of dollars)for the year?
A) $610.
B) $410.
C) $490.
D) $570.

Accepted Answer

The answer of The following data (in thousands of dollars)...

Quiz 2: Cost Terms, Concepts, and Classifications

Gabel Inc.is a merchandising company.Last month,the company's merchandise purchases totalled $63,000.The company's beginning merchandise inventory was $13,000,and its ending merchandise inventory was $15,000.What was the company's cost of goods sold for the month?

During January,the cost of goods manufactured was $93,000.The beginning finished goods inventory was $16,000,and the ending finished goods inventory was $20,000.What was the cost of goods sold for the month?

Haack Inc.is a merchandising company.Last month,the company's cost of goods sold was $84,000.The company's beginning merchandise inventory was $20,000,and its ending merchandise inventory was $18,000.What was the total amount of the company's merchandise purchases for the month?

Robert Smith earns $16 per hour assembling products.For each hour over 40 he works in a week,he is paid time-and-a-half.During a given week,he worked 45 hours and had no idle time.How much of his weekly wages would be charged to the manufacturing overhead account?

During the first week of April,Gillian worked a total of 50 hours assembling products and had no idle time.Gillian is paid $15 per hour for regular time,and is paid time-and-a-half for all hours in excess of a 40-hour week.How much of Gillian's wages for the week should be charged to direct labour?

The beginning balance of the raw materials inventory account for May was $27,500.The ending balance for May was $28,750,and $128,900 of raw materials were used during the month.What was the cost of the materials purchased during the month?