Question

1. Yummy Tummy Desserts has 3,000 quarts of ice cream in WIP Inventory, with all materials already added. What are equivalent units in ending WIP Inventory for materials if the ice cream is 67% through the process?

	990
	3,000
	0
	2,010

2. How do fixed costs react in total and on a per unit basis?

	Fixed costs increase in total as production increases and remain constant on a per unit basis.
	Fixed costs remain constant in total and on a per unit basis as production increases.
	Fixed costs remain constant in total and decrease per unit as production increases.
	Fixed costs increase in total and on a per-unit basis. 3. Sykes Company has sales revenue of $585,700. Cost of goods sold before adjustment is $335,900. The company's actual manufacturing overhead is $91,900 while allocated manufacturing overhead is $105,300. What is the actual gross profit? $263,200 $249,800 $157,900 $236,400 4.  Baxter Company produces Frisbees using a three-step sequential process that includes molding, coloring, and finishing. At what stage would the sets be allocated Manufacturing Overhead? When the Frisbees are in WIP Inventory-Coloring When the Frisbees are in WIP Inventory-Finishing When the Frisbees are in WIP Inventory-Molding All of the above 5. Which method are managers using when they use their judgment to classify costs as variable, fixed, or mixed? Low-high method Regression analysis Account analysis High-low method 6. Which of the following is not a way in which management can use job cost information? Determining the balance in raw materials inventory Preparing the financial statements Assessing and comparing the profitability of each product type Using the cost information in determining the bid price for custom orders 7. Which of the following is not a way in which management can use job cost information? Determining the balance in raw materials inventory Preparing the financial statements Assessing and comparing the profitability of each product type Using the cost information in determining the bid price for custom orders 8. Tall Timbers reports the following data for its first year of operation: Work in process inventory, beginning $ 0 Work in process inventory, ending $50,200 Manufacturing overhead $25,400 Direct materials used $7,700 Direct Labor $60,000 Finished goods inventory, beginning $ 0 Finished goods inventory, ending $20,000 Cost of goods manufactured $42,900 What is the cost of goods sold? $22,900 $76,000 $73,100 $42,900 9.   A deodorant manufacturer offers the following information: WIP Inventory, January 1 0 units Units started 33,600 units Units completed and transferred out 11,200 units WIP Inventory, December 31 22,400 units Direct materials $276,480 Direct labor $585,000 Manufacturing Overhead $328,920 The units in ending WIP Inventory were 60% complete for materials and 40% complete for conversion costs. On December 31, what are the total equivalent units for direct materials? 47,040 33,600 20,160 24,640 10. How is the cost of indirect materials used in the factory recorded? Credit to Raw Materials Inventory account Credit to Manufacturing Overhead account Credit to Direct Materials Expense account Credit to Work-in-Process Inventory account 11. XYZ uses job costing. Actual manufacturing overhead for the period is $20,300 while allocated manufacturing overhead is $18,200. What entry will close the manufacturing overhead balance? Debit the Cost of Goods Sold account and credit the Finished Goods Inventory account for $2,100. Debit the Manufacturing Overhead account and credit the Work-in-Process account for $2,100. Debit the Cost of Goods Sold account and credit the Manufacturing Overhead account for $2,100. Debit the Manufacturing Overhead account and credit the Cost of Goods Sold account for $2,100.

Answer 1

Since, multiple questions have been posted, I have answered the first three.

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Question 1:

3,000. (which is Option B)

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Explanation:

For materials, the equivalent units in ending WIP Inventory for materials would be taken at 100%. Therefore, the number of equivalents units will be calculated as follows:

Equivalent Units in Ending WIP Inventory for Materials = 3,000*100% = 3,000 units

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Question 2:

Fixed costs remain constant in total and decrease per unit as production increases. (which is Option C)

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Explanation:

Total fixed costs remain constant irrespective of the level of production. Therefore, as production increases, the per unit fixed cost decreases. This is demonstrated with the use of following example:

Let us assume that at a production level of 10,000 units, the total fixed cost is $120,000. At this level, the fixed cost per unit is $12 (120,000/10,000). If the production increases to 12,000 units, the total fixed cost will continue to be $120,000. However, fixed cost per unit will decrease to $10 per unit (120,000/12,000) indicating a decline of $2 per unit ($12-$10) with an increase in production level.

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Question 3:

The value of actual gross profit is calculated as follows:

Actual Gross Profit = (Sales - Cost of Goods Sold) + (Overhead Allocated - Actual Manufacturing Overhead)

Using the information provided in the question in the above formula, we get,

Actual Gross Profit = (585,700 - 335,900) + (105,300 - 91,900) = $263,200. (which is Option A)