FATέH UNIVERSITY
FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENCES
DEPARTMENT OF MANAGEMENT
MAN
305 COST ACCOUNTING
MIDTERM
EXAM I
Instructor:
Ali COSKUN
Duration: 90
Minutes October 20, 2004
Question 1.
The
following data (in thousands of dollars) have been taken from the accounting
records of Karling Corporation for the just completed year.
Administrative expenses .............
.. $150
Direct labor ....................
........ $200
Finished goods inventory, beginning .
.. $120
Finished goods inventory, ending ....
.... $160
Manufacturing overhead incurred ...
.... $230
Materials
inventory, beginning
........
. $ 40
Materials
inventory, ending .....
......
.. $ 70
Purchases of raw materials .........
.. $120
Sales
................................... $990
Selling expenses ..................
...... $140
Work in process inventory, beginning
.. $ 70
Work in process inventory, ending ....
... $ 50
Prepare
a cost of goods manufactured schedule and an income statement for the year.
Question 2.
The following journal entries without
dollar data were taken from the accounting records of Crack Company. Crack
Company has a job-order costing system and applies overhead to jobs using a
budgeted overhead rate.
1. Work in Process
...................... XXX
MOH Control ........................... XXX
Wages Payable ......................... XXX
2.MOH Control ...........................
XXX
Raw Materials ......................... XXX
3.MOH Control ...........................
XXX
Accumulated Depreciation ...... XXX
4. Work in Process
...................... XXX
Raw Materials ......................... XXX
5. Work in Process
...................... XXX
MOH Allocated ...................... XXX
6. Finished Goods
....................... XXX
Work in Process ...................... XXX
7. Raw Materials
......................... XXX
Accounts Payable .................... XXX
a. Which one is the entry to record the
purchase of raw materials: ..........................
b. The entry to transfer the cost of
goods manufactured for the period is: ..............................
c. The entry to record
the allocation of overhead is: ..............
d. The entry to record
depreciation on manufacturing equipment is: ............
Question 3.
The Transformer Company uses a job-order
cost system. The following information was recorded for September:
Added During September
September 1
Direct Direct
Job Number Inventory Materials Labor
41
$1,000 $ 300 $200
42
1,400
250
300
43
500
1,500 150
44
750 4,000 400
The direct labor wage rate is $10 per
hour. Overhead is allocated at the rate of $5 per direct labor-hour. Jobs 41, 42,
and 43 have been completed and transferred to finished goods. Job 42 has been
delivered to the customer. (only Job 44 still in WIP
inventory)
a. How much is the ending Work in
Process inventory?
b. How much is The Cost of Goods Manufactured
for September?
c. How much is The Cost of Goods Sold
for September (before disposition of any under- or overapplied overhead)?
Question 4.
The following T accounts are for Stanford Company:
|
Material
Inventory |
|
Work
in Process |
|
Finished
Goods Inventory |
|||
|
(Beg.)
7,000 (1)
19,000 |
24,000 (2) |
|
(Beg.)
11,000 (2)
15,000 (4)
18,000 (6)
31,000 |
62,000 (7) |
|
(Beg.)
18,000 (7)
62,000 (End.)
15,000 |
? (8) |
|
|
|
|
|
|
|
|
|
|
MOH
Control |
|
MOH
Allocated |
|
Cost
of Goods Sold |
|||
|
(2) 9,000 (3)
16,000 (4) 8,000 (5) 5,000 |
|
|
|
31,000 (6) |
|
(8) ? |
|
|
|
|
|
|
|
|
|
|
|
Wages
Payable |
|
Accounts
Payable |
|
Accumulated
Depreciation |
|||
|
|
26,000 (4) |
|
|
19,000 (1)
5,000 (5) |
|
|
82,000 (Beg.) 16,000 (3) |
a. How much is the indirect labor cost?
.........................
b. The cost of goods manufactured is:
............................
c. The cost of goods sold (before
adjustment for under- or overallocated overhead) is: .......................
d. The cost of direct materials used is:
......................................
e. The ending Work in Process account
balance would be: ..............................
f. How much is the under- or overallocated
overhead? ................................
Question 5.
Tarrell Company
uses a budgeted overhead rate based on direct labor hours to allocate
manufacturing overhead to jobs. At the beginning of the year the company
estimated its total manufacturing overhead cost at $400,000 and its direct
labor-hours at 100,000 hours. The actual overhead cost incurred during the year
was $350,000 and the actual direct labor hours incurred on jobs during the year
was 90,000 hours.
a. Determine the budgeted manufacturing overhead
rate.
b. What is the manufacturing overhead allocated?
c. Compute over-or under allocated manufacturing
overhead.
d. What is the proper journal entry to write off the
over-or under allocated manufacturing overhead to cost of goods sold.
Multiple Choice
Questions
*
Variable costs are costs whose per unit costs vary as the activity level rises
and falls.
a) True b)
False
*
Indirect manufacturing labor costs include the compensation of all
manufacturing labor that can be traced to the cost object in an economically
feasible way.
a) True b) False
*
Job-costing system is a system where the cost object is an individual unit,
batch, or lot of a distinct product or service.
a) True b) False
*
Inventoriable costs are all costs of a product that are regarded as an asset
when they are incurred and then become cost of goods sold when the product is
sold.
a) True b) False
*
In a manufacturing company, goods available for sale equals the sum of the cost
of goods manufactured and the beginning finished goods inventory.
a) True b)
False
*
Prime cost consists of direct materials combined with:
a) direct
labor. b)
manufacturing overhead.
c) indirect
materials. d) cost
of goods manufactured.
*
Actual costs are defined as
a) costs
incurred. b) direct
costs. c) indirect
costs. d) predicted
costs.
*
Each of the following would be a period cost except:
a)
the salary of the company president's secretary. b) the cost of
a general accounting office.
c)
depreciation of a machine used in manufacturing. d) sales
commissions.