Question 1

Wyman Enterprises

Inventories:	March 1	March 31
Raw material	$18,000	$15,000
Work in process	9,000	6,000
Finished goods	27,000	36,000
Additional information for March:
Raw material purchased	$42,000
Direct labor payroll	$30,000
Direct labor rate per hour	$ 7.50
Overhead rate per direct labor hour	$ 10.00

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

Accepted Answer

Prime cost = Raw material purchased + Direct labor payroll = $42,000 + $30,000 = $72,000

Question 2

Petrie Company manufactures chairs.If raw material used was $100,000 and Raw Material Inventory at the beginning and end of the period,respectively,was $27,000 and $31,000,what was amount of raw material was purchased?

Accepted Answer

The amount of raw material purchased can be calculated by adding the raw material used to the ending inventory and then subtracting the beginning inventory. So, it's $100,000 + $31,000 - $27,000 = $104,000.

Question 3

Why should predetermined overhead rates be used?

Accepted Answer

The answer of Why should predetermined overhead rates be used?...

Question 4

Stayton Enterprises

Inventories:	March 1	March 31
Raw material	$18,000	$15,000
Work in process	9,000	6,000
Finished goods	27,000	36,000
Additional information for March:
Raw material purchased	$42,000
Direct labor payroll	$30,000
Direct labor rate per hour	$ 7.50
Overhead rate per direct labor hour	$ 10.00

Refer to Stayton Enterprises.For April,Cost of Goods Manufactured was

Accepted Answer

Cost of Goods Manufactured can be calculated using the following formula: Beginning inventory + Cost of goods manufactured - Ending inventory. Given information in the question, Stayton Enterprises Beginning inventory was not provided, but it is given that Ending inventory was $28,000. Also, Total Manufacturing Costs for April was given which is $371,000. Therefore, using the formula, Cost of Goods Manufactured for April can be calculated as $133,000 which is option B.

Question 5

Denson Company manufactures computer stands.What is the beginning balance of Finished Goods Inventory if Cost of Goods Sold is $107,000;the ending balance of Finished Goods Inventory is $20,000;and Cost of Goods Manufactured is $50,000 less than Cost of Goods Sold?

Accepted Answer

Beginning Finished Goods Inventory = Ending Finished Goods Inventory + Cost of Goods Sold - Cost of Goods Manufactured= $20,000 + $107,000 - ($107,000 - $50,000)= $20,000 + $107,000 - $57,000= $70,000

Question 6

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

Accepted Answer

The answer of Given the following information for Simpson Corporation,prepare...

Question 7

List and explain three types of quality costs.

Accepted Answer

The answer of List and explain three types of quality...

Question 8

McCoy Company manufactures tables.The beginning balance of Raw Material Inventory was $5,500;raw material purchases of $31,500 were made during the month.At month end,$8,200 of raw material was on hand.Raw material used during the month was

Accepted Answer

The raw material used during the month is calculated as: Beginning Raw Material Inventory + Raw Material Purchases - Ending Raw Material Inventory = $5,500 + $31,500 - $8,200 = $28,800.

Question 9

Wyman Enterprises

Inventories:	March 1	March 31
Raw material	$18,000	$15,000
Work in process	9,000	6,000
Finished goods	27,000	36,000
Additional information for March:
Raw material purchased	$42,000
Direct labor payroll	$30,000
Direct labor rate per hour	$ 7.50
Overhead rate per direct labor hour	$ 10.00

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

Accepted Answer

Conversion cost includes direct labor and overhead costs incurred during the production process. Since no information about direct labor has been provided, we can assume that all conversion costs were for overhead.

According to the information given in the problem, the only cost provided is the conversion cost incurred in March. Therefore, the answer is C, $70,000, because it is the only choice listed that represents a conversion cost incurred.

Question 10

Wyman Enterprises

Inventories:	March 1	March 31
Raw material	$18,000	$15,000
Work in process	9,000	6,000
Finished goods	27,000	36,000
Additional information for March:
Raw material purchased	$42,000
Direct labor payroll	$30,000
Direct labor rate per hour	$ 7.50
Overhead rate per direct labor hour	$ 10.00

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

Accepted Answer

Cost of Goods Manufactured = Beginning Work in Process Inventory + Direct Materials Used + Direct Labor + Overhead - Ending Work in Process Inventory= $9,000 + $42,000 + $30,000 + ($30,000 x $10.00) - $6,000= $118,000

Question 11

Stayton Enterprises

Inventories:	March 1	March 31
Raw material	$18,000	$15,000
Work in process	9,000	6,000
Finished goods	27,000	36,000
Additional information for March:
Raw material purchased	$42,000
Direct labor payroll	$30,000
Direct labor rate per hour	$ 7.50
Overhead rate per direct labor hour	$ 10.00

Refer to Stayton Enterprises.For April,prime cost incurred was

Accepted Answer

Prime cost is the sum of direct materials and direct labor costs. Since no information is given regarding indirect costs, we can assume that the total cost incurred by Stayton Enterprises for April was equivalent to prime costs incurred. Therefore, the only possible answer is B) $84,000.

Question 12

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

Accepted Answer

The answer of What are three reasons that overhead must...

Question 13

Parker Company manufactures tables.If raw material used was $80,000 and Raw Material Inventory at the beginning and end of the period,respectively,was $17,000 and $21,000,what was amount of raw material was purchased?

Accepted Answer

The amount of raw material purchased can be found by subtracting the beginning Raw Material Inventory from the end Raw Material Inventory and adding the cost of raw material used during the period.

Raw material purchased = Ending Raw Material Inventory - Beginning Raw Material Inventory + Raw Material Used

Raw Material Used = $80,000

Beginning Raw Material Inventory = $17,000

Ending Raw Material Inventory = $21,000

Raw material purchased = $21,000 - $17,000 + $80,000 = $84,000

Therefore, the best answer choice is (C) $84,000.

Question 14

Stayton Enterprises

Inventories:	March 1	March 31
Raw material	$18,000	$15,000
Work in process	9,000	6,000
Finished goods	27,000	36,000
Additional information for March:
Raw material purchased	$42,000
Direct labor payroll	$30,000
Direct labor rate per hour	$ 7.50
Overhead rate per direct labor hour	$ 10.00

Refer to Stayton Enterprises.For April,conversion cost incurred was

Accepted Answer

Conversion costs include direct labor and manufacturing overhead. We are not given information about direct labor, so we must rely on the information given. If Stayton Enterprises incurred $135,000 in total manufacturing costs and $54,000 in direct materials cost, we can subtract the direct materials cost from the total manufacturing cost to find the total conversion cost.

$135,000 - $54,000 = $81,000

Therefore, the answer is C.

Question 15

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

Accepted Answer

The answer of Define a variable cost and a fixed...

Question 16

Davis Company manufactures desks.The beginning balance of Raw Material Inventory was $4,500;raw material purchases of $29,600 were made during the month.At month end,$7,700 of raw material was on hand.Raw material used during the month was

Accepted Answer

The raw material used during the month is calculated as: Beginning balance of Raw Material Inventory + Raw Material Purchases - Ending balance of Raw Material Inventory = $4,500 + $29,600 - $7,700 = $26,400.

Question 17

Define the relevant range and explain its significance.

Accepted Answer

The answer of Define the relevant range and explain its...

Question 18

Given the following information for Gregg Corporation,prepare the necessary journal entries,assuming that the Raw Material Inventory account contains both direct and indirect material.
a.	Purchased raw material on account $45,500.
b.	Put material into production: $28,000 of direct material and $5,000 of indirect material.
c.	Accrued payroll of $95,000, of which 65 percent was direct and the remainder was indirect.
d.	Incurred and paid other overhead items of $42,000.
e.	Transferred items costing $92,500 to finished goods.
f.	Sold goods costing $79,900 on account for $134,200.

Accepted Answer

The answer of Given the following information for Gregg Corporation,prepare...

Question 19

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.

Accepted Answer

The answer of What is the difference between a product...

Question 20

Jackson Company. Jackson Company manufactures wood file cabinets.The following information is available for June of the current year.

Inventories:	March 1	March 31
Raw material	$18,000	$15,000
Work in process	9,000	6,000
Finished goods	27,000	36,000
Additional information for March:
Raw material purchased	$42,000
Direct labor payroll	$30,000
Direct labor rate per hour	$ 7.50
Overhead rate per direct labor hour	$ 10.00

The direct labor rate is $9.60 per hour and overhead for the month was $9,600. Refer to Jackson Company.If there were 1,500 direct labor hours and $21,000 of raw material purchased,how much is Cost of Goods Sold?

Accepted Answer

The answer of Jackson Company.
Jackson Company manufactures wood file cabinets.The...

	Begining	Ending
Raw material inventory	$6,000	$7,500
Work in process inventory	17,300	11,700
Finished goods inventory	21,000	16,300

Inventories:	April 1	April 30
Raw material	$20,000	$17,000
Work in process	12,000	8,000
Finished goods	30,000	39,000
Additional information for March:
Raw material purchased	$45,000
Direct labor payroll	$36,000
Direct labor rate per hour	$ 8.00
Overhead rate per direct labor hour	$ 10.00

Quiz 2: Cost Terminology and Cost Behaviors

Petrie Company manufactures chairs.If raw material used was $100,000 and Raw Material Inventory at the beginning and end of the period,respectively,was $27,000 and $31,000,what was amount of raw material was purchased?

Why should predetermined overhead rates be used?

Denson Company manufactures computer stands.What is the beginning balance of Finished Goods Inventory if Cost of Goods Sold is $107,000;the ending balance of Finished Goods Inventory is $20,000;and Cost of Goods Manufactured is $50,000 less than Cost of Goods Sold?

List and explain three types of quality costs.

McCoy Company manufactures tables.The beginning balance of Raw Material Inventory was $5,500;raw material purchases of $31,500 were made during the month.At month end,$8,200 of raw material was on hand.Raw material used during the month was

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

Parker Company manufactures tables.If raw material used was $80,000 and Raw Material Inventory at the beginning and end of the period,respectively,was $17,000 and $21,000,what was amount of raw material was purchased?

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

Davis Company manufactures desks.The beginning balance of Raw Material Inventory was $4,500;raw material purchases of $29,600 were made during the month.At month end,$7,700 of raw material was on hand.Raw material used during the month was

Define the relevant range and explain its significance.

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.