Question

16. MC.15-147

A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true?

a.The company will recognize $96,000 gross profit on the balance sheet.

b.The company will decrease finished goods by $54,000.

c.The company will increase finished goods by $54,000.

d.The company will recognize sales on the balance sheet of $150,000.

17. MA.15-190

Bartel Corporation produces bar stools for restaurants. For each of the following, indicate whether the cost would typically be considered direct or indirect cost for the cost object given.

Clear All
Direct Indirect		The production labor wages for the bar stool assemblers The factory supervisor's salary for the bar stool factory Lubricants used on the bar stool manufacturing equipment Manufacturing costs for wood and steel used in the bar stools Nails and screws used in the production of the bar stools

18. MA.15-195

For each of the following, indicate whether the cost would typically be considered product or period cost for the cost object given.

Clear All
Product Period		Tires for the bicycles Electricity costs to run the factory Selling costs for the period Delivery costs to take the bicycles to stores Accountant salaries

19. MC.15-141

A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and had $114,000 in factory overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $32,000, respectively, the cost of goods manufactured was

a.$190,000

b.$226,000

c.$222,000

d.$218,000

20. MC.15-148

The cost of goods sold for Michaels Manufacturing in the current year was $233,000. The January 1 finished goods inventory balance was $31,600, and the December 31 finished goods inventory balance was $24,200. Cost of goods manufactured during the period was

a.$233,000

b.$240,400

c.$225,600

d.$288,800

Answer 1

Question 16

Correct answer---- (b).The company will decrease finished goods by $54,000.

Gross profit and sales will be recorded on income statement.

Question 17

Solution

	Classification
The production labor wages for the bar stool assemblers	Direct
The factory supervisor's salary for the bar stool factory	Indirect
Lubricants used on the bar stool manufacturing equipment	Indirect
Manufacturing costs for wood and steel used in the bar stools	Direct
Nails and screws used in the production of the bar stools	Indirect

Question 19

Solution

	Classification
Tires for the bicycles	Product
Electricity costs to run the factory	Product
Selling costs for the period	Period
Delivery costs to take the bicycles to stores	Period
Accountant salaries	Period

Question 19

Correct answer---- d.$218,000

Direct Material Used	$       35,000.00
Direct labor	$       73,000.00
Manufacturing overheads applied	$   1,14,000.00
Total manufacturing Cost incurred during the period	$   2,22,000.00
Add: Work in process Beginning	$       28,000.00
Total Manufacturing cost to account for	$   2,50,000.00
Less: Work in process Ending	$       32,000.00
Cost of Goods Manufactured	$   2,18,000.00

Question 20

Correct answer---- c.$225,600

Cost of goods sold	$ 2,33,000.00
Add: Ending finished goods inventory	$      24,200.00
Total Goods available for sale	$ 2,57,200.00
Less: Beginning finished goods inventory	$      31,600.00
Cost of goods manufactured	$ 2,25,600.00