Key_Multichoice_Chapter6 - YourResults 1 base A...

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Your Results: The correct answer for each question is indicated by a  Which of the following manufacturing costs are allocated to products indirectly using an allocation  base? A) Direct materials B) Direct labor C) Overhead D) All of the above E) Feedback: Direct materials and direct labor are "allocated" directly, but overhead is  allocated to products based on some activity such as direct labor hours, direct  labor cost, or machine hours. The Consul Company incurred the following costs to produce 5,000 desks in February: direct  materials, $20,000; direct labor, $30,000; and manufacturing overhead, $25,000. What was the  cost assigned to each desk produced? A) $10.00 B) $15.00 C) $20.00 D) $25.00 E) None of the above Feedback:  Unit costs are calculated by dividing total costs by the number of units produced.  In this case, the total cost to manufacture 5,000 desks was $75,000. Therefore, the  cost per desk was $75,000/5,000 = $15 per desk. In 2006, Mayfair Corporation had a beginning inventory in Work-in-Process of $42,000. During  2006, Mayfair incurred the following manufacturing costs: direct materials, $120,000; direct labor,  $140,000; and overhead, $100,000. Mayfair's ending Work-in-Process inventory was $27,000.  The cost transferred to Finished Goods was: A) $360,000 B) $375,000 C) $385,000 D) $390,000 E) None of the above Feedback: The basic cost flow model is: beginning balance + transfers in -  transfers out = ending balance. So, $42,000 + $360,000 - transfers out = $27,000.  1/7
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Solving for the transfers out, $42,000 + $360,000 - $27,000 = $375,000. Flow Company had no beginning work-in-process inventory. The company started 300,000 units  this period and had 60,000 units in ending work-in-process inventory that were 40% complete.  How many units were transferred out of work-in-process this period? A) 240,000 B) 254,000 C) 264,000 D) 276,000 E) None of the above Feedback: Beginning inventory + units started this period - ending inventory =  units transferred out. Therefore, 0 + 300,000 - 60,000 = 240,000. Mammoth Corporation uses direct labor hours to allocate overhead to work-in-process. The  company's budgeted overhead is $420,000 and it expects to produce 40,000 ceramic elephants  next period. It takes 2 direct labor hours to produce one elephant. If Mammoth actually works  60,000 direct labor hours, how much overhead should be assigned to work-in-process? A)
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This note was uploaded on 06/14/2010 for the course ACCOUNTING 123456 taught by Professor Vananh during the Spring '10 term at Vaasan ammattikorkeakoulu.

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Key_Multichoice_Chapter6 - YourResults 1 base A...

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