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Cost accounting : MCQs

Mannix Company has gathered the following data related to its production process of two of its products for the week ended April 30:

Model #100 B #250C
Quantity produced 60 100
Unit-level material cost $ 42,000 $ 100,000
Variable conversion cost 72,000 300,000
Total direct costs $114,000 $ 400,000
Indirect costs
Indirect manufacturing cost 163,200 272,000
Indirect operating cost 255,000 425,000
Total indirect costs 418,200 697,000
Total costs $532,200 $1,097,000

5. The throughput cost per unit for Product 250C is:
A) $10,970
B) $ 4,000
C) $ 1,000
D) $ 6,970

6. The absorption cost per unit for product 250C was:
A) $1,900
B) $9,760
C) $6,970
D) $6,720

Use the following information for Summerside Manufacturing Company for questions 7-9:

Work-in- Process Finished Goods
Beginning Balance $15,000 $18,000
Transfers In 25,000 ?
Transfers Out 22,000 ?
Ending Balance ? $15,000

7. The cost of goods sold for the period was:
A) $3,000
B) $28,000
C) $22,000
D) $25,000

8. The ending Balance in Work-in-Process was:
A) $ 3,000
B) $30,000
C) $ 18,000
D) $ 12,000

9. The cost of goods manufactured for the period was:
A) $15,000
B) $22,000
C) $18,000
D) $40,000

D'Allessandro Company has a process costing system using the weighted-average cost flow method. All materials are introduced at the beginning of the process in Department 1. The following information is available for the month of January:

Units
Work-in-Process, January 1 (40% complete as to conversion cost) 2,000
Started in January 12,000
Transferred to Department 2 during January 11,000
Work-in-Process, January (20% complete as to conversion cost) 3,000

17. The number of equivalent units of production for material costs for the month of January is:
A) 14,000
B) 11,600
C) 12,000
D) 11,000

18. The number of equivalent units of production for conversion costs for the month of January is:
A) 10,800
B) 12,000
C) 11,000
D) 11,600

21. In the cost equation TC = F + VX, the slope is represented by which of the following?
A) TC
B) F
C) V
D) X

22. In the cost formula TC = F + VX, which variable is considered to be the independent variable?
A) TC
B) F
C) V
D) X

24. Engineers and accountants working together with present and future cost information predict the following cost information for the Devine Chocolate Candy Bar Company's new LoCarb Bar:

The cost of materials for each bar is $0.62
The labor, materials and overhead associated with each batch of bars is $12.50
The Rate per New Customer is expected to be $185 per new wholesale customer
New Product Management Cost will be $840 for the product
The associated Facility costs will be $1490

Assume 4000 bars are produced in 40 batches for 75 new wholesale customers.

Based upon the engineering analysis estimated total cost for this new product are
A) $27,138.
B) $19,185
C) $18,345.
D) $16,855

25. An increase in the production volume within the relevant range will result in:
A) an increase in the fixed cost per unit.
B) a proportionate increase in total fixed costs.
C) no change in the fixed cost per unit.
D) a decrease in the fixed cost per unit.

26. Which of the following would be an example of a variable cost?
A) Chief executive officer's salary.
B) Straight-line depreciation.
C) Direct materials used in production.
D) All of the above.

27. Contribution margin is:
A) sales revenue minus cost of goods sold.
B) sales revenue minus all variable costs.
C) sales revenue minus variable production costs.
D) sales revenue minus all variable and fixed costs.

28. At the break-even point of 1,400 units, variable costs are $84,000, and fixed costs are $42,000. What would operating income be if 1,401 units are sold?
A) $ 30.
B) $ 60.
C) $ 90.
D) $140

29. Chocolate Extreme sells both hard candy and chocolate candy. The current sales mix is 2 units of hard candy for every 3 units of chocolate candy. Hard candy has a contribution margin of $4 per unit, while chocolate candy has a contribution margin of $2 per unit. If fixed cost are $420,000 what are the total units sold at the break-even point (rounded)?
A) 56,000 units of hard candy and 84,000 units of chocolate candy.
B) 60,000 units of hard candy and 90,000 units of chocolate candy.
C) 67,200 units of hard candy and 100,800 units of chocolate candy.
D) 72,000 units of hard candy and 108,000 units of chocolate candy.

The following standard cost information is available for Zero Co.'s only product: Direct material 8 feet at $4.50 per foot. Actual information for August: 3,000 units were produced; 20,000 feet of direct material were purchased at a cost of $92,000 and 23,800 feet of material were used.

38. What is the material purchase price variance for August?
A) $2,000 favorable
B) $1,180 unfavorable
C) $2,000 unfavorable
D) $1,180 favorable

39. What is the material quantity variance for August?
A) $ 900 unfavorable
B) $ 920 unfavorable
C) $ 900 favorable
D) $ 920 favorable

Riyyad Co. produces its only product in a highly automated process, expected monthly production is 50,000 units. The required direct material costs $0.85 per unit. Manufacturing overhead costs are $75,000 per month and are allocated based on units of production.

42. What is the budgeted manufacturing overhead rate?
A) $1.00 per unit
B) $1.50 per unit
C) $0.85 per unit
D) $0.67 per unit

43. What is the total flexible budget for 50,000 units and 25,000 units, respectively?
A) $117,500; $58,750
B) $ 75,000; $37,500
C) $ 75,000; $38,000
D) $117,500; $96,250

Solution Preview

Please see attached file.

Mannix Company has gathered the following data related to its production process of two of its products for the week ended April 30:

Model #100 B #250C
Quantity produced 60 100
Unit-level material cost $ 42,000 $ 100,000
Variable conversion cost 72,000 300,000
Total direct costs $114,000 $ 400,000
Indirect costs
Indirect manufacturing cost 163,200 272,000
Indirect operating cost 255,000 425,000
Total indirect costs 418,200 697,000
Total costs $532,200 $1,097,000

Note: - As data about number of units sold is not given , it is assumed that all the units produced are sold . Under absorption costing, total (material cost and conversion cost) variable cost of production and indirect manufacturing cost production are considered to value inventory. Throughput costing considers only direct material cost in valuing inventory

5. The throughput cost per unit for Product 250C is:
A) $10,970
B) $ 4,000
C) $ 1,000
D) $ 6,970
Assumed that no beginning or ending inventory . Total cost / Quantity produced =$1097000/100 =$10970
Cost of inventory per unit= Direct material cost /Quantity produced =$100000/100 =$1000

6. The absorption cost per unit for product 250C was:
A) $1,900
B) $9,760
C) $6,970
D) $6,720
Assumed that no beginning or ending inventory. Total cost / Quantity produced =$1097000/100 =$10970
Cost of inventory per unit=(Direct material cost +Variable conversion cost +indirect manufacturing cost)/Quantity produced =($100000+300000+272000)/100 =$672000/100 =$6720
Use the following information for Summer side Manufacturing Company for questions 7-9:

Work-in- Process Finished Goods
Beginning Balance $15,000 $18,000
Transfers In 25,000 22000*
Transfers Out 22,000 25000*
Ending Balance 18000* $15,000
*Finish goods transfers in = WIP transfer out =$22000
*Finish goods transfers out = Beginning balance +Transfer in-Ending balance =$18000+$22000-$15000 =$25000
? WIP ending balance = Beginning balance +Transfer in -Transfer out =$15000+$25000-$22000 =$18000

7. The cost of goods sold for the period was:
A) $3,000
B) $28,000
C) $22,000
D) $25,000
GOGS= Finish goods ...

Solution Summary

Word document contains answers and explanations of multiple choice questions.

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