Connect Quiz - 1

input figures in cells marked with this colour

1 Guaranteed Appliance Co. produces washers and dryers in an assembly-line process. Labor costs incurred during a recent period w
corporate executives, $530,000; assembly-line workers, $195,000; security guards, $42,000; and plant supervisor, $125,000. The tot
Guaranteed’s direct labor cost was:
Wages to assembly line workers 195,000

2 The accounting records of Comacho Company revealed the following costs, among others:
Factory insurance 39,000
Raw material used 262,000
Customer entertainment 21,000
Indirect labor 52,000
Depreciation on salespersons' cars 29,000
Production equipment rental costs 78,000
Costs that would be considered in the calculation of manufacturing overhead total:

Factory insurance 39,000

Indirect labor 52,000
Production equipment rental costs 78,000
169,000

3 The accounting records of Falcon Company revealed the following information:

Raw materials used 63,000
Direct labor 128,000
Manufacturing overhead 363,000
Work-in-process inventory, 1/1 53,000
Finished-goods inventory, 1/1 192,000
Work-in-process inventory, 12/31 79,000
Finished-goods inventory, 12/31 143,000
Falcon's cost of goods manufactured is:

Raw materials used 63,000

Direct labor 128,000
Manufacturing overhead 363,000
Work-in-process inventory, 1/1 53,000
Work-in-process inventory, 12/31 79,000
Cost of goods manufactured 528,000

4 The accounting records of Stingray Company revealed the following information:

Total manufacturing costs 640,000
Work-in-process inventory, 1/1 67,000
Finished-goods inventory, 1/1 157,000
Work-in-process inventory, 12/31 89,000
Finished-goods inventory, 12/31 134,000
Stingray's cost of goods sold is:

Total manufacturing costs 640,000

Work-in-process inventory, 1/1 67,000
Work-in-process inventory, 12/31 89,000
Cost of goods manufactured 618,000
 Finished-goods inventory, 1/1 157,000
Finished-goods inventory, 12/31 134,000
Cost of goods sold 641,000

5 Rainier Industries has Raw materials inventory on January 1, 20x8 of $34,500 and Raw materials inventory on December 31, 20x
$28,700. If raw materials used during the year were $155,000 what was the amount of raw materials purchased during the year?

Opening inventory 34,600

Closing inventory 28,800
Materials consumed during the
156,000
year
Purchases during the year 150,200

6 Dorsett Technologies had finished goods inventory on January 1, 20X8 of $31,700 and finished goods inventory on December 31, 20X
$26,500. If the cost of goods sold for the year was $432,100, what was the cost of goods manufactured for the year?

Opening inventory 30,000

Closing inventory 24,800
Cost of goods sold 428,800
Purchases during the year 423,600

7 The following selected information was extracted from the 20x3 accounting records of Farrina Products:
Raw materials used 302,000
Direct labor 205,000
Indirect labor 44,000
Selling and administrative salaries 295,000
Building depreciation* 420,000
Other selling and administrative expenses 89,000
Other factory costs 550,000
*Eighty five percent of the company's building was devoted to production activities; the remaining 15% was used for selling
administrative functions.

Farrina’s beginning and ending work-in-process inventories amounted to $339,000 and $267,000, respectively. The company's begin
and ending finished-goods inventories were $472,000 and $451,000, respectively.

Required:

Calculate Farrina’s manufacturing overhead for the year.

Calculate Farrina’s cost of goods manufactured.
Compute Farrina’s cost of goods sold.
A Manufacturing overhead 909,000
B Cost of goods manufactured 1,483,000
C Cost of goods sold 1,499,000

Calculation of manufacturing overhead

Indirect labor 44,000 100% 44,000
Building depreciation 420,000 75% 315,000
Other factory costs 550,000 100% 550,000
Manufacturing overhead 909,000

Calculation of cost of goods manufactured

Raw materials used 302,000
Direct labor 205,000
Manufacturing overhead 909,000
 Manufacturing costs for the year 1,416,000
Opening inventory of WIP 324,000
Closing inventory of WIP 257,000
Cost of goods manufactured 1,483,000

Calculation of cost of goods sold

Opening inventory of FG 462,000
Cost of goods manufactured 1,483,000
Closing inventory of FG 446,000
Cost of goods manufactured 1,499,000

8 The Enrique Company recorded the following transactions for February 20x1:
Work in Finished
Materials
Process Goods
Purchases 121,000
Beginning inventory 185,000 9,400 E
Ending inventory A 37,000 37,000
Direct materials used 104,000
Direct labor B
Manufacturing overhead (includes indirect materials used of $10,800) 129,000
Transferred to finished goods C
Cost of goods sold D
Sales were $572,000, with sales prices determined by adding a 30% markup to the firm's manufacturing cost. The total cost of d
materials used, direct labor, and manufacturing overhead during the month was $301,000. Note: The materials account includes both d
materials and indirect materials.
Required:
Calculate the missing values
A Ending materials 191,200
B Direct labour 70,000
C Transferred to finished goods 275,400
D Cost of goods sold 370,000
E Beginning finished goods 131,600

Calculation of ending materials

Beginning inventory 185,000
Purchases 121,000
Consumption of direct materials 104,000
Consumption of indirect materials 10,800
Ending materials 191,200

Calculation of direct labour

Cost of direct materials used, labor & man o/hs 303,000
Consumption of direct materials 104,000
Manufacturing overheads 129,000
Direct labour 70,000

Calculation of transferred to finished goods

Beginning inventory 9,400
Cost of direct materials used, labor & man o/hs 303,000
Ending inventory 37,000
Transferred to finished goods 275,400
 Calculation of cost of goods sold
Sales 518,000
Markup 40%
Cost of goods sold 370,000

Calculation of beginning finished goods

Transferred to finished goods 275,400
Cost of goods sold 370,000
Ending inventory 37,000
Beginning finished goods 131,600

9 A foundry employee worked a normal 40-hour shift, but five hours were idle due to a small fire in the plant. The employee earns $24
hour.
How much of this compensation is a direct-labor cost? How much is overhead?
Direct labour cost 592
Overhead cost 48

No. of hours 40
Idle time 3
No. of productive hours 37
Rate 16

10 On April 12, after the close of business, Singh & Sons had a devastating fire that destroyed the company’s work-in-process and finis
goods inventories. Fortunately, all raw materials escaped damage because materials owned by the firm were stored in another wareho
The following information is available:
Sales revenue through April 12 330,000
Income before taxes through April 12 68,000
Direct labor through April 12 120,000
Cost of goods available for sale, April 12 265,000
Work-in-process inventory, January 1 21,000
Finished-goods inventory, January 1 35,000
Gross margin 30 % of sales
The firm’s accountants determined that the cost of direct materials used normally averages 25 percent of prime costs (i.e., direct mater
direct labor). In addition, manufacturing overhead is 50 percent of the firm’s total production costs.
Required:
Singh & Sons is in the process of negotiating a settlement with its insurance company. Prepare an estimate of the cost of work-in-pro
and finished-goods inventories that were destroyed by the fire.
Cost of FG inventory 34,000
Cost of WIP inventory 111,000

Calculation of closing FG inventory

Particulars Amount
Sales 330,000
Margin % 30%
Margin 99,000
Cost of goods sold 231,000
Opening FG 35,000
Cost of goods available for sale 265,000
Closing FG 34,000

Calculation of closing WIP inventory

Particulars Amount
 Cost of goods manufactured 230,000
Opening WIP 21,000
Manufacturing oh as a % of production cost 50%
Prime cost as a % of production cost 50%
Material cost as a % of prime cost 25%
Labour cost as a % of prime cost 75%
Labour cost as a % of production cost 37.50%
Labour cost 120,000
Total production cost 320,000
Closing WIP 111,000

11 [The following information applies to the questions displayed below.]

Highlander Cutlery manufactures kitchen knives. One of the employees, whose job is to cut out wooden knife handles, worked 45 h
during a week in January. The employee earns $18 per hour for a 40-hour week, and overtime is paid after 40 hours. For additional h
the employee is paid an overtime rate of $23 per hour. The employee’s time was spent as follows:
Regular duties involving cutting out knife handles 51 hours
General shop cleanup duties 6 hours
Idle time due to power outage 2 hours
Determine the portion of this cost to be classified in each of the following categories:
Direct labour 969
Manufacturing oh (idle time) 38
Manufacturing oh (ot premium) 95
Manufacturing oh (indirect labour) 114
Total cost of wages 1,216

Particulars Hrs Rate Amount

Wages in regular hours 40 19 760
Wages in overtime hours 19 24 456
Total cost 1,216

Allocation
Direct labour 51 19 969
Manufacturing o/h (idle time) 2 19 38
Manufacturing o/h (OT premium) 19 5 95
Manufacturing o/h (indirect labour) 6 19 114
1,216

12
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14 The accounting records of Dixon Company revealed the following costs: direct materials used, $250,000; direct labor, $475
manufacturing overhead, $387,000; and selling and administrative expenses, $270,000. Dixon's product costs total:
Direct materials 300,000
Direct labour 435,000
Manufacturing oh 382,000
Total 1,117,000

15 The accounting records of Younkin Corporation revealed the following selected costs: Sales commissions, $62,000; plant supervi
$220,000. and administrative expenses, $186,000. Younkin’s period costs total:
Sales commissions 61,000
Administrative expense 184,000
Total 245,000
urred during a recent period were:
t supervisor, $125,000. The total of
nventory on December 31, 20x8 of
chased during the year?

nventory on December 31, 20X8 of

or the year?

ng 15% was used for selling and

pectively. The company's beginning

uring cost. The total cost of direct
aterials account includes both direct
 plant. The employee earns $24 per

any’s work-in-process and finished-

m were stored in another warehouse.

f prime costs (i.e., direct material +

mate of the cost of work-in-process

den knife handles, worked 45 hours
after 40 hours. For additional hours
$250,000; direct labor, $475,000;
costs total:

ssions, $62,000; plant supervision,