Question

a) Hank Co. recently opened a new state of the art, high tech manufacturing plant, and management made the decision to install a just in time production system. How would labor costs, overhead costs and work in process inventory levels at this plant respectively compare with those at other Fulton facilities?

a. lower, higher, higher b. lower, lower, lower   c. lower, higher, lower   d. higher, higher, higher   e. higher, lower, higher

b) Crystal Industries began June with a finished good inventory of $13,000. The finished goods inventory at the end of June was $10,000 and the the cost of goods sold during the month was $20,000. The cost of goods manufactured during June was:

a. $17,000 b. $20,000 c. 27,000 d. $7,000

c) In July, Candle Co. produced 4,000 bags at a total cost of $110,000. In June, it produced 2,500 bags at a total cost of $87,500. In May, it produced 2,500 bags at a total cost of $89,000. Using the High Low method, what was the unit variable cost of producing a bag?

d) Andy Co. sells a single product at $20 per unit. The firm's most recent income statement revealed unit sales of 100,000, variable costs of $800,000, and fixed costs of $400,000. If a $4 drop in selling price will boost unit sales volume by 20% the company will experience:

a. $400,000 drop in profitability b. $80,000 drop in profitability c. $240,000 drop in profitability d. no change in profit

e) Candy Inc. recently sold goods that cost $35,000 for $45,000 cash. The journal entries to record this transaction would include:

a. debit to accounts receivable for $45,000 b. credit to sales revenue for $45,000 c. debit for finished goods inventory for $35,000

d. credit to work in process inventory for $35,000 e. credit cost of goods sold for $35,000

f) At a production and sales level of 3,000 units, Candle Co. incurred $60,000 of total fixed costs and $36,000 of total variable costs. When 4,000 units of product are produced and sold the company's cost per unit is:

a. $32 b. $24 c. $27 d. $29

g) Hank Co reported the following data for the year just ended: sales revenue, $790,000; cost of goods sold, $450,000; cost of goods manufactured, $380,000; and selling and administrative expenses, $125,000. National's operating income (or loss) would be $___?

h) Gary, Inc applies manufacturing overhead at the rate of $40 per machine hour. Budgeted machine hours for the current period were anticipated to be 70,000; however a lengthy strike resulted in actual machine hours being worked of only 55,000. Budgeted and actual manufacturing overhead for the year were $2,800,000 and $2,150,000. How much was the company 's year end overhead mis-applied (under or over applied)?

Answer 1