201-Quiz1-Ver2-S'11 - Name Recitation Section: Quiz 1...

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Unformatted text preview: Name Recitation Section: Quiz 1 Version 2 (Blue) Management 201 Spring 2011 A. TERNE CORPORATION At the beginning of the month Terne Corporation had no finished jobs that were unsold, but had two jobs in process with the following costs assigned from previous months: Direct Materials $500 400 Direct Labor $1,280 840 Applied Overhead ? ? 1. This quiz consists of 2 problems; the last question is on the back of this test. The point value for each problem is: A. B. TERNE CORPORATION MORE TERNE TOTAL POINTS 15 points 5 points 20 points Job No. X-10 Y-12 During the month, Jobs X-10 and Y-12 were both completed. No additional materials were required to finish Jobs X-10 or Y-12. To complete Job X-10 required an additional $1,400 in direct labor costs; to complete Job Y-12 required an additional $4,000. Only Job X-10 was sold. During the month, a new Job Z-14 was started but not finished; direct materials requisitioned for Job Z14 amounted to $700. No other new jobs were started. Terne uses normal costing. During the month total direct labor costs for all jobs was $8,240. Overhead is applied at a pre-determined rate of 50 percent of direct labor costs. This same rate has been used for the entire year. Actual overhead for the month was $4,000. Required: A1. What is the ending balance in the Work-in-process Inventory? Work: 2. You have 30 minutes for this exam; no notes are allowed. 3. No notes are allowed. communication. You may not use a calculator that allows storage of information or 4. Show all of your calculations. Correct answers, which are not accompanied by work indicating how the answer was derived, will not receive any credit. Even if the answer can be computed in your head, indicate your thought process on paper. Partial credit will be given only where the logic and handwriting can be easily followed. This means calculations must be labeled and presented in an orderly fashion. The grader will not search for your numbers; nor may one explain ex post how one got one's answer. 5. None of you would cheat; however, for completeness please recall the penalty for cheating is an F in the course. A2. What is the ending balance in the Finished Goods Inventory? Work: A. MORE TERNE Why would a company like Terne use normal costing in place of actual costing? Answer this question using the following format: For each reason you have for a company using normal costing, make a summary of your reason and underline this sentence. Under your summary sentence, elaborate on your main point. Then go on to your second reason for using normal costing. This is like making a series of bullet points with elaboration after each main point. Failure to follow this format will result in a point reduction. A3. Assume all over- or under-applied overhead is closed to the Cost of Goods Sold account. What is the adjusted Cost of Goods Sold for the month; that is what is the total Cost of Goods Sold after any over- or under-applied OH is closed out to the COGS account? Work: ...
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This note was uploaded on 02/23/2012 for the course MGMT 201 taught by Professor Rowe during the Spring '08 term at Purdue.

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