Question

1)

The following information pertains to the Frameworks Corporation for May. Calculate the cost of goods sold for the period:

Beginning Finished Goods Inventory	$	22,500
Ending Finished Goods Inventory		21,000
Cost of Goods Manufactured		129,800

Multiple Choice

$128,300.

$131,300.

$173,300.

$129,800.

$152,300.

2)

Cameroon Corp. manufactures and sells electric staplers for $15.00 each. If 10,000 units were sold in December, and management forecasts 5% growth in sales each month, the dollar amount of electric stapler sales budgeted for February should be:

Multiple Choice

$182,326

$157,500

$150,000

$165,375

$173,644

3)

Kreighton Manufacturing purchased on credit £54,000 worth of production materials from a British company when the exchange rate was $2.01 per British pound. At the year-end balance sheet date the exchange rate increased to $2.80. If the liability is still unpaid at that time, Kreighton must record a:

Multiple Choice

gain of $151,200.

gain of $42,660.

loss of $151,200.

neither a gain nor loss.

loss of $42,660.

4)

A company’s flexible budget for 12,000 units of production showed sales, $46,800; variable costs, $12,000; and fixed costs, $28,000. The contribution margin expected if the company produces and sells 28,000 units is:

Multiple Choice

$28,000.

$46,800.

$74,800.

$12,000.

$81,200.

5)

The following information pertains to the Packer Corporation. Calculate the cost of goods sold for the period:

Beginning Raw Materials	$	31,000
Ending Raw Materials		71,000
Beginning Work in Process Inventory		41,000
Ending Work in Process Inventory		47,000
Beginning Finished Goods Inventory		73,000
Ending Finished Goods Inventory		69,000
Cost of Goods Manufactured for the period		247,000

Multiple Choice

$251,000.

$243,000.

$259,000.

$247,000.

$291,000.

Answer 1

Solution 1:

Cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory

= $22,500 + $129,800 - $21,000 = $131,300

Hence 2nd option is correct.

Solution 2:

Budgeted sales units for February = 10000 *1.05*1.05 = 11025 units

Budgeted sales for february = 11025*$15 = $165,375

Hence 4th option is correct.

Solution 3:

Loss due to increase in exchange rate on balance sheet date = ($2.80 - $2.01) * 54000 Pound = $42,660

Hence last option is correct.

Solution 4:

Contribution margin per unit = ($46,800 - $12,000)/12000 = $2.90 per unit

Expected contribution margin on production and sale of 28000 units = 28000*$2.90 = $81,200

Hence last option is correct.

Solution 5:

Cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory

= $73,000 + $247,000 - $69,000 = $251,000

Hence first option is correct.