ACCT 505 Week 2 Quiz - New 2016
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1. (TCO B) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. Several companies in different industries are listed below.
i. Specialty coffee roaster (roasts small batches of specialty coffee beans)
ii. Custom aircraft builder
iii. Brick manufacturer
iv. Microbrewery that produces a number of specialty beers
v. Steel company making chain link fences from iron ore
vi. Breakfast cereal manufacturer
For each company, indicate whether the company is most likely to use job-order costing or process costing. (Points : 15)
2. (TCO B) Job 728 was recently completed. The following data have been recorded on its job cost sheet.
Direct materials $89,925
Direct labor hours 1,220 labor hours
Direct labor wage rate $15 per labor hour
Machine hours 1,550 machine hours
Number of units completed 4,500 units
The company applies manufacturing overhead on the basis of machine hours. The predetermined overhead rate is $18 per machine hour.
Compute the unit product cost that would appear on the job cost sheet for this job. (Points : 15)
4. (TCO A) Honeysuckle Corporation has provided the following data for the month of January.
Inventories Beginning Ending
Raw materials $40,000 $23,000
Work in process $9,000 $13,000
Finished goods $52,000 $45,000
Raw material purchases $68,000
Direct labor costs $81,000
Manufacturing overhead cost incurred $47,000
Indirect materials included in manufacturing overhead costs incurred $8,000
Manufacturing overhead cost applied to work in process $39,000
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form. (Points : 15)