Question

Hubley Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed out to cost of goods sold at the end of the month. The company has provided the following data for August:

Direct materials	$	78,750
Direct labor cost	S	94,000
Manufacturing overhead cost incurred	$	61,275
Manufacturing overhead cost applied	$	65,800

Inventories:	Beginning	Ending
Work in process	$17,500	$19,850
Finished goods	$61,500	$38,250

The cost of goods sold that appears on the income statement for August and that has been adjusted for any underapplied or overapplied overhead is closest to:

$254,925

$263,975

$236,200

$259,450

Burrel Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In June the company completed job E08D that consisted of 25,000 units of one of the company's standard products. No other jobs were in process during the month. The job cost sheet for job E08D shows that the job's total cost was $1,232,500. During the month, 18,000 completed units from job E08D were sold. No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead) for June is closest to:

rev: 10_20_2017_QC_CS-105904

$1,232,500

$887,400

$897,200

$955,600

Acton Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.

Estimated manufacturing overhead	$182,990
Estimated machine-hours	2,900
Actual manufacturing overhead	$177,900
Actual machine-hours	2,840

The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year.

The predetermined overhead rate is closest to:

$63.10

$62.91

$62.64

$62.45

Crombie Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed out to cost of goods sold at the end of the month. The company has provided the following data for June:

Direct materials	$	44,000
Direct labor cost		75,500
Manufacturing overhead cost incurred	$	75,750
Manufacturing overhead cost applied	$	80,390

Inventories:	Beginning	Ending
Work in process	$15,400	$25,620
Finished goods	$62,930	$29,900

The unadjusted cost of goods sold (in other words, cost of goods sold before adjusting for any underapplied or overapplied overhead) for June is closest to:

Noreen 4e Recheck 2017-16-03

$199,890

$218,060

$189,670

$222,700

Bartelt Inc., which produces a single product, has provided the following data for its most recent month of operations:

Number of units produced		4,600
Variable costs per unit:
Direct materials	$	91
Direct labor	$	85
Variable manufacturing overhead	$	7
Variable selling and administrative expenses	$	10
Fixed costs:
Fixed manufacturing overhead	$	161,000
Fixed selling and administrative expenses	$	326,600

There were no beginning or ending inventories. The absorption costing unit product cost was:

$176 per unit

$218 per unit

$183 per unit

$299 per unit

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

Selling price	$	166
Units in beginning inventory		0
Units produced		11,200
Units sold		10,500
Units in ending inventory		700
Variable cost per unit:
Direct materials	$	51
Direct labor	$	51
Variable manufacturing overhead	$	6
Variable selling and administrative	$	4
Fixed costs:
Fixed manufacturing overhead	$	380,800
Fixed selling and administrative expenses	$	168,000

What is the total period cost for the month under variable costing?

rev: 07_06_2016_QC_CS-55178

$380,800

$210,000

$548,800

$590,800

Crystal Corporation produces a single product. The company's variable costing income statement for the month of May appears below:

Crystal Corporation Income Statement For the month ended May 31
Sales ($20 per unit)	$3,800,000
Variable expenses:
Variable cost of goods sold	2,280,000
Variable selling expense	570,000
Total variable expenses	2,850,000
Contribution margin	950,000
Fixed expenses:
Fixed manufacturing overhead	560,000
Fixed selling and administrative	190,000
Total fixed expenses	750,000
Net operating income	$200,000

The company produced 140,000 units in May and the beginning inventory consisted of 100,000 units. Variable production costs per unit and total fixed costs have remained constant over the past several months.

Under absorption costing, for May the company would report a:

$200,000 loss

$0 profit

$200,000 profit

$400,000 profit

Aaker Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price	$247
Units in beginning inventory	0
Units produced	9,000
Units sold	8,150
Units in ending inventory	850
Variable costs per unit:
Direct materials	$57
Direct labor	$87
Variable manufacturing overhead	$25
Variable selling and administrative	$25
Fixed costs:
Fixed manufacturing overhead	$297,000
Fixed selling and administrative	$211,900

What is the unit product cost for the month under absorption costing?

Noreen 4e Rechecks 2017-24-03

$202 per unit

$194 per unit

$227 per unit

$169 per unit

Cutterski Corporation manufactures a propeller. Shown below is Cutterski's cost structure:

	Variable cost per propeller	Total fixed cost for the year
Manufacturing cost	$127	$1,140,000
Selling and administrative expense	$30	$516,100

In its first year of operations, Cutterski produced 91,200 propellers but only sold 79,400.

What would Cutterski report as its cost of goods sold under absorption costing?

$10,083,800

$11,076,300

$11,922,700

$13,974,400

Cutterski Corporation manufactures a propeller. Shown below is Cutterski's cost structure:

	Variable cost per propeller	Total fixed cost for the year
Manufacturing cost	$104	$1,428,000
Selling and administrative expense	$ 35	$829,800

In its first year of operations, Cutterski produced 95,200 propellers but only sold 92,200.

What is the total cost that would be assigned to Cutterski's finished goods inventory at the end of the first year of operations under variable costing?

$417,000

$357,000

$489,000

$312,000

Carr Company produces a single product. During the past year, Carr manufactured 30,140 units and sold 24,600 units. Production costs for the year were as follows:

Direct materials	$253,176
Direct labor	$147,686
Variable manufacturing overhead	$223,036
Fixed manufacturing overhead	$572,660

Sales were $1,242,300 for the year, variable selling and administrative expenses were $140,220, and fixed selling and administrative expenses were $217,008. There were no units in beginning inventory. Assume that direct labor is a variable cost.

The contribution margin per unit was: (Do not round intermediate calculations.)

$29.80

$25.20

$19.60

$24.10

Answer 1

Solution 1:

Cost of goods sold that appears on the income statement for August and that has been adjusted for any underapplied or overapplied overhead is closest to $259,450

Hubley Inc.
Statement of Cost of Goods Sold
For the Month Ended August 31, XXX
Particulars	Amount ($)	Amount ($)
Direct Materials	78,750
Direct Labour	94,000
Applied Manufacturing overhead	65,800
Total manufacturing costs		238,550
Add: opening WIP	17,500
Less: Closing WIP	19,850
Cost of goods manufactured		236200
Add: opening finished goods	61,500
Less: Closing finished goods	38,250
Cost of goods sold		259,450