Acct 505 Mid Term

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1.| Question :| (TCO F) Assume there is no beginning work in process inventory and the ending work in process inventory is 100% complete with respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is:

| Student Answer: The same as the number of units put into production. |
2.| Question :| (TCO F) Process costing would be appropriate for each of the following except:|
Student Answer: custom furniture manufacturing.
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3.| Question :| (TCO F) Which of the following accounts is debited when direct labor is recorded?Student Answer: Work in process | |

4.| Question :| (TCO F) During December at Ingrim Corporation, $74,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. The journal entry to record the requisition from the storeroom would include a:| Answer: | debit to Work in Process of $68,000. |

5.| Question :| (TCO F) Valles Corporation had $22,000 of raw materials on hand on February 1. During the month, the company purchased an additional $75,000 of raw materials. The journal entry to record the purchase of raw materials would include a:|

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Answer: debit to Raw Materials of $75,000. | |

6.| Question :| Emeril’s Utensils has collected the following production data for the past four months: Units produced Total cost7,000 $16,50010,000 22,5008,500 17,7509,000 21,000If the high-low method is used, what is the monthly total cost equation?|

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| Student Answer:| | Total cost = $2,500 + ($2.00 * units produced | ||
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1.| Question :| (TCO F) Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below:

i. Brick manufacturer
ii. Contract printer that produces posters, books, and pamphlets to order iii. Natural gas production company
iv. Dairy farm
v. Coal mining company
vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)

For each company, indicate whether the company is most likely to use job-order costing or process costing.|
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| Student Answer:| | 1. Process Costing 2. Job-order costing 3. Process costing 4. job-order costing 5. process costing 6. job order costing | | Instructor Explanation:| i. Brick manufacturer | Process Costing| ii. Contract printer that produces posters, books, and pamphlets to order | Job Order Costing| iii. Natural gas production company | Process Costing|

iv. Dairy farm | Process Costing|
v. Coal mining company| Process Costing|
vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)| Job Order Costing|
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| Points Received:| 13 of 15 |
| Comments:| |
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2.| Question :| (TCO F) Job 827 was recently completed. The following data have been recorded on its job cost sheet: Direct materials| $61,050| Direct labor hours| 1,332 labor hours|
Direct labor wage rate| $14 per labor-hour|
Machine Hours| 1,480 machine hours|
Number of units completed| 3,700 units|

The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour. Compute the unit product cost that would appear on the job cost sheet for this job.|

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| Student Answer:| | Direct material $61,050.00 Direct labor cost $18,648 ($14 x 1332 hours) Manufacturing overhead $19240 (predetermined over head rate $13x 1480) Total = $98,938/3700 units = $26.74 unit product cost | | Instructor Explanation:| Direct materials| $61,050|

Direct labor ($14 per DLH, 1,332 DLHs) | 18,648|
Manufacturing Overhead ($13 per MH, 1,480 MHs)| 19,240|
Total Cost| $98,938|
Unit Product Cost| $26.74|
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| Points Received:| 15...
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