[siraznrunsalot]

1. Case 20.4
The USA Company manufactures flags in a single process. The following information is available:

Work in process inventory, Jan. 1 —0— units
Units started in production 18,000 units
Units completed and transferred out 12,000 units
Work in process inventory, Dec. 31 6,000 units
Production costs:
Direct materials $213,885
Direct labor 577,500
Manufacturing overhead 391,875

The units still in process are 45% complete with respect to direct materials and 35% complete with respect to conversion costs.

Refer to Case 20.4. What are the equivalent units for conversion costs?
A) 13,750 units
B) 12,000 units
C) 14,100 units
D) 14,700 units

2. Case 20.7
Forsyth Company produces calendars in a one-process department. Materials are introduced at the beginning of the process. Conversion is applied uniformly throughout the process. The weighted-average method of costing is used. Data for the current period is as follows:

Beginning work in process inventory (40% complete) 22,500 units
Units started in current period 130,000 units
Units completed in current period 124,000 units
Ending work in process inventory ( 60% complete) 28,500 units

Costs contained in beginning work in process inventory
Direct materials $51,900
Conversion $20,174
Costs added during current period
Direct materials $430,000
Conversion $310,000

Refer to Case 20.7. What are the equivalent units for conversion?
A) 124,000
B) 152,500
C) 141,100
D) 130,000

[siraznrunsalot]

Case 20.4 *Correction*
Work in process inventory, Jan. 1 —0— units*

[siraznrunsalot]

1. E-commerce can integrate all of a company's worldwide functions, departments, and data. (TRUE)

2. The same accounts are used when preparing the income statement for a merchandiser and the income statement for a manufacturer. (TRUE)

3. Customer service expense would be found on the income statement of a service company but NOT the income statement of a manufacturer. (FALSE)

4. Since service firms do NOT carry inventory, it is not necessary to know the costs related to different jobs. (FALSE)

5. A job cost record is a document that accumulates direct materials, direct labor, and manufacturing overhead costs assigned to each individual job. (TRUE)

6. Job costing systems accumulate costs for each individual job. (TRUE)

7. The Production Equivalent Unit Report summaries the costs to account for, the equivalent units, the cost per equivalent unit and how those costs are assigned. (TRUE)

8. Transferred-in costs are incurred in a previous process and are carried forward as part of the product's cost when it moves to the next process. (TRUE)

9. If unit sales prices, unit variable costs and total fixed costs remain the same, but the sales mix changes, there is no effect on the breakeven point. (FALSE)

10. Cost of goods manufactured over units produced equals the unit product cost. (TRUE)

11. The most significant cost for a service firm is direct labor. (TRUE)

12. In a process costing system, a separate work in process inventory account is maintained for each process. (TRUE)

13. Fixed costs per unit increase as production levels decrease. (TRUE)

14. A philosophy of providing customers with superior products and services is called total quality management. (FALSE)

15. Manufacturing overhead is credited for actual manufacturing overhead costs incurred throughout the year. (FALSE)

[siraznrunsalot]

1. Lakeside Company estimated manufacturing overhead costs for 2009 at $378,000, based on 180,000 estimated direct labor hours. Actual direct labor hours for 2009 totaled 195,000. Manufacturing overhead contains debit entries totaling $391,500. What was the amount of manufacturing overhead for 2009?
A) $18,000 underallocated
B) $18,000 overallocated
C) $31,500 underallocated
D) $31,500 overallocated

2. Sunbucks Coffee sells three large coffees for every two small ones. A small coffee sells for $3, with a variable cost of $1.50. A large coffee sells for $5 with a variable cost of $3. What is the weighted-average contribution margin?
A) $1.50
B) $6.00
C) $1.80
D) $3.00

3. A merchandiser's purchases are equivalent to what for a manufacturer?
A) materials inventory
B) work in process inventory
C) cost of goods sold
D) cost of goods manufactured

4. The number of equivalent units in work in process regarding direct materials and conversion costs is what?
A) must be lower for materials
B) may be different
C) must be lower for conversion
D) must always be equal

5. Leggins Company sells two products, X and Y. Product X sells for $20 per unit with variable costs of $15. Product Y sells for $24 with variable costs of $20. Total fixed costs for the company are $38,000. Leggins Company typically sells three Product Xs for every Product Y. What is the breakeven point in total units?
A) 8,000 units
B) 2,000 units
C) 6,000 units
D) 6,333 units

6. Which of the following groups are internal users of financial information?
A) Customers
B) Creditors
C) Managers
D) Suppliers

[siraznrunsalot]

Case 19.10
Cruise Company uses a job costing system and had the following data available for 2009.

Beginning materials inventory $36,000
Beginning work in process inventory 64,000
Beginning finished goods inventory 54,000
Materials purchased on account 148,000
Direct materials requisitioned 85,000
Direct labor cost incurred 135,000
Actual manufacturing overhead incurred 162,000
Cost of goods completed 295,000
Cost of goods sold 260,000
Predetermined manufacturing overhead rate 125%
(as a percent of direct labor)

Refer to Case 19.10. The journal entry to record the sale of all jobs for the entire year would include which of the following?
A) credit to finished goods inventory for $295,000
B) debit to cost of goods sold for $295,000
C) credit to finished goods inventory for $260,000
D) debit to finished goods inventory for $295,000

[Curlyben]

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