Question 1

When recording the direct labor costs in transaction (c)above, the Work in Process inventory account will increase (decrease)by:

Accepted Answer

A) $458,896 
B) $475,080 
C) ($475,080) 
D) ($458,896) 
A) $458,896 
B) $475,080 
C) ($475,080) 
D) ($458,896)

Question 2

Signore Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The standard cost card for the company's only product is as follows:   During the year, the company purchased 34,600 gallons of raw material at a price of $9.10 per gallon and used 30,050 gallons of the raw material to produce 20,100 units of work in process.

Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash, Raw Materials, Work in Process, Finished Goods, and PP&E (net).All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings.

When the purchase of raw materials is recorded, which of the following entries will be made?

Accepted Answer

A) $3,460 in the Materials Quantity Variance column 
B) ($3,460)in the Materials Price Variance column 
C) $3,460 in the Materials Price Variance column 
D) ($3,460)in the Materials Quantity Variance column 
A) $3,460 in the Materials Quantity Variance column 
B) ($3,460)in the Materials Price Variance column 
C) $3,460 in the Materials Price Variance column 
D) ($3,460)in the Materials Quantity Variance column

Question 3

Dobrowolski Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which products are recorded at their standard cost and any variances are closed directly to Cost of Goods Sold.There is no variable manufacturing overhead.The standard cost card for the company's only product is as follows:   
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $75,000 and budgeted activity of 10,000 hours.

During the year, the company applied fixed overhead to the 12,900 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed.Actual fixed overhead costs for the year were $62,600.Of this total, -$3,400 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $66,000 related to depreciation of manufacturing equipment.

Required:
Completely record the transactions involving fixed overhead, including any variances, in the worksheet that appears below.Because of the width of the worksheet, it is in two parts.In your text, these two parts would be joined side-by-side to make one very wide worksheet.The beginning balances have been provided for each of the accounts, including the Property, Plant, and Equipment (net)account which is abbreviated as PP&E (net).

Accepted Answer

Budget variance = Actual fixed overhead

Question 4

Santiago Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.There is no variable manufacturing overhead.The standard cost card for the company's only product is as follows:   
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $192,000 and budgeted activity of 12,000 hours.

During the year, the company completed the following transactions:
a.Purchased 53,000 liters of raw material at a price of $6.80 per liter.
b.Used 47,620 liters of the raw material to produce 13,200 units of work in process.
c.Assigned direct labor costs to work in process.The direct labor workers (who were paid in cash)worked 8,220 hours at an average cost of $19.20 per hour.
d.Applied fixed overhead to the 13,200 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed.Actual fixed overhead costs for the year were $180,700.Of this total, $116,700 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $64,000 related to depreciation of manufacturing equipment.
e.Transferred 13,200 units from work in process to finished goods.
f.Sold for cash 12,800 units to customers at a price of $56.50 per unit.
g.Completed and transferred the standard cost associated with the 12,800 units sold from finished goods to cost of goods sold.
h.Paid $39,000 of selling and administrative expenses.
i.Closed all standard cost variances to cost of goods sold.

Required:
1.Compute all direct materials, direct labor, and fixed overhead variances for the year.
2.Record the above transactions in the worksheet that appears below.Because of the width of the worksheet, it is in two parts.In your text, these two parts would be joined side-by-side to make one very wide worksheet.The beginning balances have been provided for each of the accounts, including the Property, Plant, and Equipment (net)account which is abbreviated as PP&E (net).     
3.Determine the ending balance (e.g., 12/31 balance)in each account.

Accepted Answer

1.Materials price variance = AQ × (AP -

Question 5

Ladue Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The standards for direct materials for the company's only product specify 3.6 kilos per unit at $7.00 per kilo.During the year, the company purchased 67,600 kilos of raw material at a price of $6.40 per kilo and used 60,220 kilos of the raw material to produce 16,700 units of work in process.

Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash, Raw Materials, Work in Process, Finished Goods, and PP&E (net).All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings.

When recording the raw materials used in production, the Work in Process inventory account will increase (decrease)by:

Accepted Answer

A) $421,540 
B) ($421,540) 
C) $420,840 
D) ($420,840) 
A) $421,540 
B) ($421,540) 
C) $420,840 
D) ($420,840)

Question 6

When the direct labor cost is recorded, which of the following entries will be made?

Accepted Answer

A) ($6,450)in the Labor Efficiency Variance column 
B) $6,450 in the Labor Efficiency Variance column 
C) ($6,450)in the Labor Rate Variance column 
D) $6,450 in the Labor Rate Variance column 
A) ($6,450)in the Labor Efficiency Variance column 
B) $6,450 in the Labor Efficiency Variance column 
C) ($6,450)in the Labor Rate Variance column 
D) $6,450 in the Labor Rate Variance column

Question 7

When recording the raw materials used in production in transaction (b)above, the Work in Process inventory account will increase (decrease)by:

Accepted Answer

A) $101,200 
B) ($101,200) 
C) $101,750 
D) ($101,750) 
A) $101,200 
B) ($101,200) 
C) $101,750 
D) ($101,750)

Question 8

When recording the raw materials used in production in transaction (b)above, the Raw Materials inventory account will increase (decrease)by:

Accepted Answer

A) ($86,950) 
B) $101,750 
C) $86,950 
D) ($101,750) 
A) ($86,950) 
B) $101,750 
C) $86,950 
D) ($101,750)

Question 9

When the company closes its standard cost variances, the Cost of Goods Sold will increase (decrease)by:

Accepted Answer

A) ($36,300) 
B) $33,825 
C) ($33,825) 
D) $36,300 
A) ($36,300) 
B) $33,825 
C) ($33,825) 
D) $36,300

Question 10

Arellanes Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.There is no variable manufacturing overhead.The company's balance sheet at the beginning of the year was as follows:

The standard cost card for the company's only product is as follows:

The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $198,000 and budgeted activity of 18,000 hours.

During the year, the company completed the following transactions:
a.Purchased 75,900 kilos of raw material at a price of $6.40 per kilo.
b.Used 68,680 kilos of the raw material to produce 25,400 units of work in process.
c.Assigned direct labor costs to work in process.The direct labor workers (who were paid in cash)worked 24,160 hours at an average cost of $19.80 per hour.
d.Applied fixed overhead to the 25,400 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed.Actual fixed overhead costs for the year were $187,400.Of this total, $95,400 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $92,000 related to depreciation of manufacturing equipment.
e.Transferred 25,400 units from work in process to finished goods.
f.Sold for cash 24,200 units to customers at a price of $52.80 per unit.
g.Completed and transferred the standard cost associated with the 24,200 units sold from finished goods to cost of goods sold.
h.Paid $121,000 of selling and administrative expenses.
i.Closed all standard cost variances to cost of goods sold.

Required:
1.Compute all direct materials, direct labor, and fixed overhead variances for the year.
2.Enter the beginning balances and record the above transactions in the worksheet that appears below.Because of the width of the worksheet, it is in two parts.In your text, these two parts would be joined side-by-side to make one very wide worksheet.     
3.Determine the ending balance (e.g., 12/31 balance)in each account.
4.Prepare an income statement for the year.

Accepted Answer

1.Materials price variance = AQ × (AP -

Question 11

When recording the raw materials purchases in transaction (a)above, the Cash account will increase (decrease)by:

Accepted Answer

A) $1,472,460 
B) ($1,366,200) 
C) $1,366,200 
D) ($1,472,460) 
A) $1,472,460 
B) ($1,366,200) 
C) $1,366,200 
D) ($1,472,460)

Question 12

The ending balance in the PP&E (net)account will be closest to:

Accepted Answer

A) $501,600 
B) $396,455 
C) $441,400 
D) $505,400 
A) $501,600 
B) $396,455 
C) $441,400 
D) $505,400

Question 13

Zaino Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.There is no variable manufacturing overhead.The standard cost card for the company's only product is as follows:   The company calculated the following variances for the year:   
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $48,750 and budgeted activity of 7,500 hours.

During the year, the company completed the following transactions:
a.Purchased 45,600 gallons of raw material at a price of $4.90 per gallon.
b.Used 40,220 gallons of the raw material to produce 23,600 units of work in process.
c.Assigned direct labor costs to work in process.The direct labor workers (who were paid in cash)worked 12,400 hours at an average cost of $21.70 per hour.
d.Applied fixed overhead to the 23,600 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed.Actual fixed overhead costs for the year were $34,050.Of this total, -$23,950 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $58,000 related to depreciation of manufacturing equipment.
e.Transferred 23,600 units from work in process to finished goods.
f.Sold for cash 23,700 units to customers at a price of $27.20 per unit.
g.Completed and transferred the standard cost associated with the 23,700 units sold from finished goods to cost of goods sold.
h.Paid $69,000 of selling and administrative expenses.
i.Closed all standard cost variances to cost of goods sold.

Required:
1.Record the above transactions in the worksheet that appears below.Because of the width of the worksheet, it is in two parts.In your text, these two parts would be joined side-by-side to make one very wide worksheet.The beginning balances have been provided for each of the accounts, including the Property, Plant, and Equipment (net)account which is abbreviated as PP&E (net).     
2.Determine the ending balance (e.g., 12/31 balance)in each account.

Accepted Answer

1.& 2. @#IMG-DLM&_TB2627_00 @#IMG-DLM&_TB2627_00 The explana

Question 14

Bascom Inc.manufactures one product.It does not maintain any beginning or ending inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.Its standard cost per unit produced is $25.75.During the year, the company produced and sold 36,000 units at a price of $31.80 per unit and its selling and administrative expenses totaled $169,000.The company does not have any variable manufacturing overhead costs.It recorded the following variances during the year:   
Required:
1.When the company closes its standard cost variances, the cost of goods sold will increase (decrease)by how much?
2.Prepare an income statement for the year.

Accepted Answer

1. @#IMG-DLM&_TB2627_00 An unfavorable t

Question 15

The net operating income for the year is closest to:

Accepted Answer

A) $45,952 
B) $128,636 
C) $226,034 
D) $283,125 
A) $45,952 
B) $128,636 
C) $226,034 
D) $283,125

Question 16

When the company closes its standard cost variances, the Cost of Goods Sold will increase (decrease)by:

Accepted Answer

A) ($90,070) 
B) $154,489 
C) $90,070 
D) ($154,489) 
A) ($90,070) 
B) $154,489 
C) $90,070 
D) ($154,489)

Question 17

When the direct labor cost is recorded, which of the following entries will be made?

Accepted Answer

A) $1,800 in the Labor Efficiency Variance column 
B) ($1,800)in the Labor Rate Variance column 
C) $1,800 in the Labor Rate Variance column 
D) ($1,800)in the Labor Efficiency Variance column 
A) $1,800 in the Labor Efficiency Variance column 
B) ($1,800)in the Labor Rate Variance column 
C) $1,800 in the Labor Rate Variance column 
D) ($1,800)in the Labor Efficiency Variance column

Question 18

When recording the direct labor costs, the Work in Process inventory account will increase (decrease)by:

Accepted Answer

A) ($249,405) 
B) $249,405 
C) ($281,435) 
D) $281,435 
A) ($249,405) 
B) $249,405 
C) ($281,435) 
D) $281,435

Question 19

Isenberg Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The company does not have any variable manufacturing overhead costs.It recorded the following variances during the year:   When the company closes its standard cost variances, the Cost of Goods Sold will increase (decrease)by:

Accepted Answer

A) ($4,500) 
B) $4,500 
C) $96,955 
D) ($96,955) 
A) ($4,500) 
B) $4,500 
C) $96,955 
D) ($96,955)

Question 20

When recording the direct labor costs, the Work in Process inventory account will increase (decrease)by:

Accepted Answer

A) ($292,855) 
B) $286,740 
C) $292,855 
D) ($286,740) 
A) ($292,855) 
B) $286,740 
C) $292,855 
D) ($286,740)

When recording the direct labor costs in transaction (c)above, the Work in Process inventory account will increase (decrease)by:

When the direct labor cost is recorded, which of the following entries will be made?

When recording the raw materials used in production in transaction (b)above, the Work in Process inventory account will increase (decrease)by:

When recording the raw materials used in production in transaction (b)above, the Raw Materials inventory account will increase (decrease)by:

When the company closes its standard cost variances, the Cost of Goods Sold will increase (decrease)by:

When recording the raw materials purchases in transaction (a)above, the Cash account will increase (decrease)by:

The ending balance in the PP&E (net)account will be closest to:

The net operating income for the year is closest to:

When the company closes its standard cost variances, the Cost of Goods Sold will increase (decrease)by:

When the direct labor cost is recorded, which of the following entries will be made?

When recording the direct labor costs, the Work in Process inventory account will increase (decrease)by:

When recording the direct labor costs, the Work in Process inventory account will increase (decrease)by:

Managerial Accounting and Cost Concepts

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Job-Order Costing: Cost Flows and External Reporting

Activity-Based Costing

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Flexible Budgets Standard Costs and Variance Analysis

Statement of Cash Flows

Financial Statement Analysis

Job-Order Costing: Cost Flows and External Reporting

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Flexible Budgets, Standard Costs, and Variance Analysis

A Capital Budgeting Decisions

A Statement of Cash Flows

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Exam 19: Flexible Budgets, Standard Costs, and Variance Analysis

When recording the direct labor costs in transaction (c)above, the Work in Process inventory account will increase (decrease)by:

When the direct labor cost is recorded, which of the following entries will be made?

When recording the raw materials used in production in transaction (b)above, the Work in Process inventory account will increase (decrease)by:

When recording the raw materials used in production in transaction (b)above, the Raw Materials inventory account will increase (decrease)by:

When the company closes its standard cost variances, the Cost of Goods Sold will increase (decrease)by:

When recording the raw materials purchases in transaction (a)above, the Cash account will increase (decrease)by:

The ending balance in the PP&E (net)account will be closest to:

The net operating income for the year is closest to:

When the company closes its standard cost variances, the Cost of Goods Sold will increase (decrease)by:

When the direct labor cost is recorded, which of the following entries will be made?

When recording the direct labor costs, the Work in Process inventory account will increase (decrease)by:

When recording the direct labor costs, the Work in Process inventory account will increase (decrease)by:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Activity-Based Costing

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Flexible Budgets Standard Costs and Variance Analysis

Statement of Cash Flows

Financial Statement Analysis

Job-Order Costing: Cost Flows and External Reporting

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Flexible Budgets, Standard Costs, and Variance Analysis

A Capital Budgeting Decisions

A Statement of Cash Flows

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