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ACCT505 Practice Quiz #1

1. For which of the following businesses would the job order cost system be appropriate? a. Auto repair shop. b. Crude Oil refinery. c. Drug Manufacturer. d. Root beer producer. 2. Which of the following companies would most likely use job costing? a. Paper manufacturer. b. Paint Producer. c. Breakfast cereal maker. d. Advertising agency. 3. An equivalent unit of conversion costs is equal to the amount of conversion costs required to: a. Start a unit. b. Start and complete a unit. c. Transfer a unit in. d. Transfer a unit out.

4. Job 655 was recently completed. The following data has been recorded on its job cost sheet: Direct materials Direct labor costs Number of units completed $ 78,000 45,000 4,000

The company applies manufacturing overhead on the basis of direct labor costs. The predetermined overhead rate is 75% of direct labor costs.

Required: Compute the unit product cost that would appear on the job cost sheet for this job

78000 + 45000 + (45000x.75)= 123000+33750=156750 156750/ 4000= 39.18

5. Prepare the necessary journal entries from the following information for Kingston Company: a. Purchased raw materials on account, $ 45,000. b. Raw materials requisitioned for use in production. Direct Materials $ 23,000; Indirect materials, $ 12,000. c. Salaries and wages cost incurred: Direct Labor cost, $ 47,000; Indirect Labor Cost, $ 15,000.

d. Depreciation on Factory Equipment, $ 12,000. e. Depreciation on Office Equipment, $ 5,000. f. Manufacturing Overhead was applied at a rate of 80% of direct labor costs. g. Goods costing $ 75,000 were completed during the period. h. Goods costing $ 36,000 were sold on account for $ 48,000.

6. Ulmer Company uses the weighted-average method in its processcosting system. The Framing Department of Ulmer Company reported the following information for the month of September: Percentage Complete with Units Conversion Respect to

Work In Process, September 1 Units Started Completed and Transferred Out Work in Process, September 30

5,000 26,000 22,000 9,000

70%

40%

Costs for September: Work in Process, September 1 Added during the month

Materials $ 37,200 $161,200

Conversion $ 48,640 $ 192,000

All materials are added at the beginning of the process.

Required:

Compute the following items using the weighted-average method:

a. The equivalent units of production for conversion costs. b. The cost per equivalent unit for conversion costs. c. The total cost assigned to units transferred out the Framing Department for September. d. The cost assigned to work in process inventory as of September 30.

7. The Simmons Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the companys inventory and cost records for the most recently completed year revealed the following information:

Units Conversion
Work In Process, March 1 ( 60% complete With respect to conversion costs) 291,200 Units started into production Costs added during the year: Materials Conversion $ 582,400 Units completed during the year 80,000 170,000

Materials

$ 200,000

$ 600,000 190,000

The company uses the weighted-average cost method in its process costing system. The ending inventory is 30% complete with respect to conversion costs. Required: a. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs. b. Determine the cost transferred to finished goods.. c. Determine the amount of cost that should be assigned to the ending work-inprocess inventory.
8. XYX Corporation has provided the following data for the month of January: Inventories Raw materials Work In process Beginning $21,000 $7,000 Ending $15,000 $9,000

Finished goods

$33,000

$30,000

Additional Information Raw material purchases Direct labor costs Manufacturing overhead cost incurred Indirect materials included in manufacturing overhead costs incurred Manufacturing overhead cost applied to work in process

$35,000 $55,000 $27,000 $2,500 $30,000

Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.