Second Review Questions

Test 1

ACG 3301 Spring 2012 Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1)

Selected information regarding a company's most recent quarter follows (all data in thousands).

Operating expenses | $ 700 | Gross profit | $ 2,390 | Sales revenue | $ 4,000 | Ending finished goods inventory | $ 200 | Cost of goods manufactured | $ 1,560 |

What was the beginning finished goods inventory?

1)

_______

A)

$1,060

B)

$860

C)

$250

D)

$1,740

Sales – COGS = Grossprofit
4000000- XX = 2390000
4000000-2390000= 1610000
COGS – COGM = XX
1610000- 1560000=50000
200000+50000=250000

2)

Zarvo Moldings allocates manufacturing overhead to jobs based on machine hours. The company has the following estimated costs for the upcoming year:

Direct materials used | $ 25,000 | Direct labor costs | $ 62,000 | Salary of factory supervisor | $ 41,000 | Advertising expense | $ 33,000 | Heating and lighting costs for factory | $ 21,000 | Depreciation on factory equipment | $ 9,000 | Sales commission | $ 8,000 |

The company estimates that 1,800 direct labor hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year. The predetermined manufacturing overhead rate per machine hour is closest to:

2)

_______

A)

$15.

B)

$100.

C)

$56.

D)

$36.

9000+21000+41000= 71000/2000=36

3)

Here are selected data for Garrett Company:

Estimated manufacturing overhead | $ 240,000 | Factory utilities | $ 29,100 | Estimated labor hours | 35,000 | Indirect labor | $ 23,500 | Actual direct labor hours | 36,000 | Sales commissions | $ 53,700 | Estimated direct labor cost | $ 300,000 | Factory rent | $ 49,200 | Actual direct labor cost | $ 320,000 | Factory property taxes | $ 28,100 | Factory depreciation | $ 67,200 | Indirect materials | $ 33,000 |

If the company allocates manufacturing overhead based on direct labor cost, what are the allocated manufacturing overhead costs?

3)

_______

A)

$240,000

B)

$230,100

C)

$256,000

D)

$400,000

4)

Dudley & Spahr, Attorneys at Law, provide a variety of legal services. The law firm uses an activity-based costing system and has developed the following activity pool cost rates:

Activity cost pool | Activity rate | Legal research | $ 48 | per hour of paralegal time | Court filing costs | $ 500 | per case filed | Document preparation | $ 17 | per document |

Cost and activity data related to two clients is as follows:

| Client 103 | Client 212 | Number of paralegal hours | 38 | 92 | Number of cases filed | 2 | 1 | Number of documents | 17 | 42 |

How much overhead cost would be allocated to Client 103 using the activity-based costing system?

4)

_______

A)

$32,205
38*48=1824 2*500=1000 17*17= 289 =3113
B)

$565

C)

$8,743

D)

$3,113

5)

Haas Corporation, a manufacturer of a variety of products, uses an activity-based costing system. Information from its system for the year for all products follows:

Activity cost pool | Total cost | Total activity | Assembly | $595,000 | 25,000 | Machine-hours | Inspection | $327,600 | 7,200 | Inspection-hours | Packaging | $19,096 | 1,540 | Orders |

Haas Corporation makes 300 of its product A92 a year, which requires a total of 48 machine hours, 10 inspection hours, and 14 orders. Product A92 requires $51.40 in direct materials per unit and $62.80 in direct labor per unit. Product A92 sells for $140 per unit. What is the product margin in total for Product A92?

5)

_______

A)
59
$5,969.00

B)

$44.10

C)

$70,114.80

D)

$13,230.00

6)

Farm Fresh Dairy provided the following expense information for May:

Assembly-line workers' wages | $ 72,000 | Caps for milk bottles | 2,000 | Reconfiguring the assembly line | 155,000 | Customer support hotline | 8,000 | Delivery expenses | 17,000 | Depreciation on factory equipment | 81,000 | Plastic milk bottles | 52,000 | Salaries of salespeople | 63,000 | Salaries of research scientists | 84,000 | Customer toll-free order line | 4,000 |

What is the total cost for the production category of the value chain?

6)

_______

A)

$538,000

B)

$52,000

C)

$374,000

D)

$207,000
72000+2000+81000+52000= 207000

1)

C

2)

D

3)

C

4)

D

5)

A

6)

D