ACCT 505 WEEK2 QUIZ

ACCT 505 WEEK2 QUIZ 1. (TCO B) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. Several companies in different industries are listed below. i. Specialty coffee roaster (roasts small batches of specialty coffee beans) ii. Custom aircraft builder iii. Brick manufacturer iv. Microbrewery that produces a number of specialty beers v. Steel company making chain link fences from iron ore vi. Breakfast cereal manufacturer For each company, indicate whether the company is most likely to use job-order costing or process costing. (Points : 15) i. Process costing ii. Job order costing iii. Process costing iv. Process costing v. Process costing vi. Process costing 2. (TCO B) Job 728 was recently completed. The following data have been recorded on its job cost sheet. Direct materials $89,925 Direct labor hours 1,220 labor hours Direct labor wage rate $15 per labor hour Machine hours 1,550 machine hours Number of units completed 4,500 units The company applies manufacturing overhead on the basis of machine hours. The predetermined overhead rate is $18 per machine hour. Compute the unit product cost that would appear on the job cost sheet for this job. (Points : 15) Direct materials $89,925 Direct labor hours $15 per DLH X 1,220 DLHs $18,300 Manufacturing overhead $18 per DLH X 1,220 DLHs $ 21,960 _________ Total cost $ 130,185 Unit product cost (Total cost/Number of units completed) $ 28.934. (TCO A) Honeysuckle Corporation has provided the following data for the month of January. Inventories Beginning Ending Raw materials $40,000 $23,000 Work in process $9,000 $13,000 Finished goods $52,000 $45,000 Additional Information Raw material purchases $68,000 Direct labor costs $81,000 Manufacturing overhead cost incurred $47,000 Indirect materials included in manufacturing overhead costs incurred $8,000 Manufacturing overhead cost applied to work in process $39,000 Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form. (Points : 15) Cost of Goods Manufactured Direct Materials Beginning materials inventory $40,000 Add: Purchase of raw materials $68,000 ________ Raw materials available for use $108,000 Deduct: Ending raw materials inventory $ 23,000 ________ Raw materials used in production $ 85,000 Less indirect materials incl manuf overhead costs incurred $ 8,000 $ 77,000 ________ Direct labor costs $81,000 Manufacturing overhead cost applied to work in proce $39,000 ________ Total manufacturing costs $197,000 Add: Beginning work in process inventory $ 9,000 ________ $206,000 Deduct: Ending work in process inventory $ 13,000 ________ Cost of Goods Manufactured $193,000___________________________________________________________________________ Cost of Goods Sold Beginning Finished goods inventory $ 52,000 Add Cost of Goods Manufactured $193,000 _________ Cost of Goods available for sale $ 245,000 Deduct: Ending Finished goods inventory $ 45,000 _________ Unadjusted Cost of Goods Sold $ 200,000 Add Underapplied manufacturing overhead* $ 8,000 _________ Adjusted Cost of Goods Sold $ 208,000 * (Manufacturing overhead cost applied to work in process minus manufacturing overhead cost actually incurred) = $39,000 - $47,000 = $ 8,00