POP QUIZ

CHAPTER 2
1. Abburi Company's manufacturing overhead is 60% of its toxtal conversion costs. If
direct labor is $52,000 and if direct materials are $28,000, the manufacturing
overhead is:
A) $34,667.
B) $78,000.
C) $42,000.
D) $120,000.

Use the following to answer questions 2 and 3:

The Argyle Company has provided the following data for the month of November:
Inventories

November
November
1
30
Raw materials ................................................................................................
$15,000
$?
Work in process .............................................................................................
12,000
10,000
Finished goods ..............................................................................................
?
7,000
Additional Data:
Sales revenue ................................................................................................
$100,000
Direct labor costs ..........................................................................................
8,000
Manufacturing overhead costs ......................................................................
10,000
Selling expenses ............................................................................................
12,000
Administrative expenses ...............................................................................
13,000
Cost of goods manufactured .........................................................................
30,000
Raw materials purchases ...............................................................................
9,000
2. The ending raw materials inventory was:
A) $11,000.
B) $16,000.
C) $ 9,000.
D) $14,000.
3. If net operating income was $50,000, then the beginning finished goods inventory was:
A) $18,000.
B) $12,000.
C) $32,000.
D) $ 2,000.

4. In the preparation of the schedule of Cost of Goods Manufactured, the accountant

incorrectly included as part of manufacturing overhead the rental expense on the
firm's retail facilities. This inclusion would:
A) overstate period expenses on the income statement.
B) overstate the cost of goods sold on the income statement.
C) understate the cost of goods manufactured.
D) have no effect on the cost of goods manufactured.

5. During the month of April, LTP Company incurred $30,000 of manufacturing

overhead, $40,000 of direct labor, and purchased $25,000 of raw materials.
Between the beginning and the end of the month, the raw materials and work in
process inventories decreased by $4,000 and $3,000, respectively. The amount of
total manufacturing costs incurred during the period, used in the computation of
cost of goods manufactured for April was:
A) $88,000
B) $91,000
C) $99,000
D) $102,000

6. Mayberry Company has only variable costs and fixed costs. A review of the
company's records disclosed that when 100,000 units were produced, fixed
manufacturing costs amounted to $200,000 and the cost per unit manufactured totaled
$5. On the basis of this information, how much cost would the firm anticipate at an
activity level of 97,000 units?
A. $485,000.
B. $491,000.
C. $494,000.
D. $500,000.
E. Some other amount not listed above.