Chapter 1
Which cost behavior contains fixed and variable cost behavior?
Mixed Cost
Job order costing is a type of what system?
Absorption Costing
What is the cost of the units finished during the year?
Cost of Goods Manufactured
If the variable selling and administrative cost is $2.25 per unit and fixed selling administrative cost is $3,000. What is the total selling administrative cost and selling and administrative cost per unit when 1,000 units are produced?
$5250; $.25 per unit
A job uses $1,000 in direct materials, $500 in direct labor (at a rate of $20 per hour), and $2,000 in manufacturing overhead applied based on direct labor dollars. What would be added to the WIP account when the job additionally uses 5 hours of direct labor?
$500
When applying MOH, do we debit or credit the MOH account? What about when we incur actual MOH?
Applied --> Credit
Actual --> Debit
Company A's relevant range of activity is 2,000 units to 4,000 units. When it produces and sells 3,500 units, its average costs per unit are as follows:
Average Cost per Unit:
Direct materials - $18.30
Direct labor - $15.10
Variable manufacturing overhead - $4.50
Fixed manufacturing overhead - $7.50
Fixed selling expense - $1.50
Fixed administrative expense - $3.20
Sales commissions - $1.00
Variable administrative expense - $0.80
What would be the total manufacturing cost when the company produces 3,750 units?
$168,375
A company uses a predetermined overhead rate to apply manufacturing overhead to jobs based on machine hours. The company estimated that it would use 500 machine-hours and incur a total manufacturing cost of $10,000. The company actually incurred a variable manufacturing overhead of $30,000 and fixed manufacturing overhead of $65,000. What would be the applied manufacturing overhead of Job C when it uses 5 machine hours?
$100
What event(s) could cause a credit in the Raw Materials Inventory account? Which account(s) would be debited then?
Direct materials used --> Debit WIP
Indirect materials used --> Debit MOH
Company D uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company estimated a total fixed manufacturing overhead cost of $60,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours at the beginning of the year. Job 51 of 2 units used 30 machine hours, $1,000 direct materials, and 5 hours of direct labor. What is the unit product cost for this job when the labor rate is $250 per hour?
$1,200
A company uses a predetermined overhead rate to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year:
Direct materials - $1,500
Direct labor - $2,000
Sales commissions - $5,000
Depreciation on Factory Equipment - $2,250
Depreciation on Selling Equipment - $350
Salary of production supervisor - $3,500
Indirect materials - $350
Selling expense - $8,000
Rent on factory equipment - $2,250
The company estimates 750 machine hours and 1,250 direct labor hours. What is the POHR when the allocation base is machine hours? And when the allocation base is direct labor hours? What is the number difference between the two?
$11.13 per machine hours; $6.68 per direct labor hour; $4.45
Company Z had a beginning WIP of $35,000 and a beginning Finished Goods Inventory of $32,000. During the company used $45,000 of Direct Materials, $25,000 of Direct Labor, and applied $55,000 of manufacturing overhead. The ending balance of WIP is $42,000, and the ending balance of Finished Goods Inventory is $36,000. What is the Cost of Goods Manufactured and the unadjusted Cost of Goods Sold?
$118,000; $114,000
Nova Corporation uses a job-order costing system and has provided the following partially completed account summary for the past year.
Raw Materials:
Beginning Balance: $22,000
Purchases: $100,000
Ending Balance: $32,000
Work in Process
Beginning Balance: $23,000
Direct Labor Used: $36,000
Direct Materials Used: $65,000
Overhead Applied: $58,000
Cost of Goods Manufactured: $125,000
Ending Balance: ?
What is the cost of indirect materials requisitioned for use in production during the year? What is the ending balance of the WIP account?
$25,000; $57,000