midterm1 Version A solution-2

# midterm1 Version A solution-2 - 1 Within the relevant range...

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1. Within the relevant range, the difference between variable costs and fixed costs is: A. variable costs per unit fluctuate and fixed costs per unit remain constant. B. variable costs per unit are constant and fixed costs per unit fluctuate. C. both total variable costs and total fixed costs are constant. D. both total variable costs and total fixed costs fluctuate. 2. Green Company's costs for the month of August were as follows: direct materials, \$28,900; direct labor, \$34,600; selling, \$12,200; administrative, \$11,500; and manufacturing overhead, \$42,500. The beginning work in process inventory was \$15,700 and the ending work in process inventory was \$8,000. What was the cost of goods manufactured for the month? dm 28,900 add dl 34600 add moh 42500 equal tmc 106,000 add beginning wip 15700 minus ending wip 8000 equal cogm 113,700 3. . Manufacturing overhead: 4. The cost of fire insurance for a manufacturing plant is generally considered to be a: 1

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5. The Lyons Company's cost of goods manufactured was \$112,000 when its sales were \$376,000 and its gross margin was \$208,000. If the ending inventory of finished goods was \$27,000, the beginning inventory of finished goods must have been: A. \$93,000 B. \$83,000 C. \$139,000 D. \$56,000 Cost of goods sold = Sales – Gross margin Cost of goods sold = \$376,000 – \$208,000 Cost of goods sold = \$168,000 Beginning finished goods inventory + Cost of goods manufactured Ending finished goods inventory = Cost of goods sold Beginning finished goods inventory + \$112,000 \$27,000 = \$168,000 Beginning finished goods inventory = \$83,000 6. Consider the following costs incurred in a recent period: Direct materials \$33,700 Depreciation on factory equipment \$14,000 Factory janitor’s salary \$23,900 Direct labor \$29,600 Utilities for factory \$9,800 Selling expenses \$17,000 Production supervisor’s salary \$34,200 Administrative expenses \$22,400 What was the total amount of the period costs listed above for the period? Selling expenses \$17,000 Administrative expenses 22,400 Total \$39,400 7. Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of \$5,000 for direct materials, \$8,000 for direct labor, and \$6,000 for overhead on its job cost sheet. Job W, which is still in process at year-end, shows charges of \$2,500 for direct materials and \$4,000 for direct labor. Should any overhead cost be added to Job W at year-end? 2

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