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    Cost Accounting - Various Questions

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    37) Gottberg Mugs is planning to sell 2,000 mugs and produce 2,200 mugs during April. Each mug requires 2 pounds of resin and a half hour of direct labor. Resin costs $1 per pound and employees of the company are paid $12.50 per hour. Manufacturing overhead is applied at a rate of 120% of direct labor costs. Gottberg has 2,000 pounds of resin in beginning inventory and wants to have 2,400 pounds in ending inventory. How much is the total amount of budgeted direct labor for April?
    A. $13,750
    B. $25,000
    C. $12,500
    D. $27,500

    38) Wacoâ??s Widgets plans to sell 22,000 widgets during May, 19,000 units in June, and 20,000 during July. Waco keeps 10% of the next monthâ??s sales as ending inventory. How many units should Waco produce during June?
    A. 21,000
    B. 19,100
    C. 18,900
    D. 19,000

    39) Lewis Hats is planning to sell 600 straw hats. Each hat requires a half pound of straw and a quarter hour of direct labor. Straw costs $0.20 per pound and employees of the company are paid $22 per hour. Lewis has 80 pounds of straw and 40 hats in beginning inventory and wants to have 50 pounds of straw and 60 hats in ending inventory. How many units should Lewis Hats produce in April?
    A. 620
    B. 600
    C. 630
    D. 580

    40) In most cases, prices are set by the
    A. competitive market
    B. customers
    C. selling company
    D. largest competitor

    41) Prices are set by the competitive market when
    A. there are no other producers capable of manufacturing a similar item
    B. the product is specially made for a customer
    C. a product is not easily distinguished from competing products
    D. a company can effectively differentiate its product from others

    42) A company must price its product to cover its costs and earn a reasonable profit in
    A. its early years
    B. all cases
    C. the short run
    D. the long run

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    Solution Summary

    The solution answers different cost accounting questions.