Question

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1. ABC Company currently produces 2,000 units of its only product. The product has the following per unit data: direct material $50, direct manufacturing labor $5, variable manufacturing overhead $14, and fixed manufacturing overhead $10. Calculate the cost per unit if ABC Company reduces production to 1,600 units.

		$81.50 per unit
		$72 per unit
		$90 per unit
		$79 per unit

2. XYZ Company has the following data: direct material used $5,000, direct labor $7,000, total factory overhead $5,100, beginning work in process $3,000, and ending work in process $4,000. Calculate the cost of goods manufactured:

		$16,100
		$24,100
		$20,100
		$13,600

3. A corporation issued 14,000 shares of its $10 par value common stock at a cash price of $13 per share. The journal entry to record this transaction would include

		a debit to Paid in Capital in Excess of Par, Common Stock for $42,000
		a credit to Common Stock for $140,000
		a debit to cash for $120,000
		a credit to Common Stock for $182,000

4. A company's overhead rate is based on direct labor hours. Estimated overhead and direct labor hours for the year were $110,000 and 125,000, respectively. During the year, actual overhead was $96,000 and actual direct labor hours were 120,000. The predetermined overhead rate per direct labor hour is

		$0.768
		$0.80
		$0.88
		Cannot be determined from the information provided

5. Assume Retained Earnings increased by $8,000 during the year. If the corporation declared and paid a $6,000 cash dividend during the year, which of the following is true?

		Net income for the year is $8,000
		Net loss for the year is $8,000
		Net income for the year is $14,000
		Net income for the year is $20,000

Answer 1

5) Net Income for the year is $8,000. If Retained Earnings is increased means net Income has been added to Retained Earnings and then dividend will be decreased from Retained Earnings.

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