Question

QUESTION 6

1. 
   Using the following information calculate the cost of goods sold:

   Utilities for the store 9,500

   Sales commissions 10,000

   Sales revenue 164,000

   Purchases of merchandise 85,000

   January 1 inventory 27,000

   Rent of store 13,500

   December 31 inventory 23,000

   	a.	$112,000
   	b.	$85,000
   	c.	$89,000
   	d.	$108,000

3 points   

QUESTION 7

1. Based on the information below what is the cost of direct materials used:

   Beginning of year End of year

   Raw materials inventory 200 180

   Work in Process inventory 320 410

   Finished goods inventory 250 200

   Sales revenue $4,000

   Purchases of direct materials $400

   Direct labor $450

   Manufacturing overhead $620

   Operating expenses $650

   	a.	$600
   	b.	$400
   	c.	$380
   	d.	$420

3 points   

QUESTION 8

1. Based on the information below what is the cost of good manufactured and completed:

   Beginning of year End of year

   Raw materials inventory 200 180

   Work in Process inventory 320 410

   Finished goods inventory 250 200

   Sales revenue $4,000

   Purchases of direct materials $400

   Direct labor $450

   Manufacturing overhead $620

   Operating expenses $650

   	a.	$1,580
   	b.	$1,490
   	c.	$1,400
   	d.	$1,380

4 points   

QUESTION 9

1. OVERallocated manufacturing overhead results when:

   	a.	Production is less than last year.
   	b.	Actual overhead is less than expected.
   	c.	Actual overhead is less than allocated overhead.
   	d.	Estimated overhead is less than actual overhead.

1 points   

QUESTION 10

1. 
   Before the year began, ABC manufacturing estimated that manufacturing overhead for the year would be $200,000 and that 25,000 direct labor hours would be worked.

   Actual results for the year included the following:

   Actual manufacturing costs $182,000

   Actual direct labor hours 20,000

   If the company allocated manufacturing overhead based on direct labor hours, the manufacturing overhead for the year would have been _________

   	a.	$18,000 Underallocated
   	b.	$22,000 Underallocated
   	c.	$18,000 Overallocated
   	d.	$22,000 Overallocated

Answer 1

Answer No 6 = Cost of Goods sold is Opening Stock + Purchases - Closing Stock

So COGS = $27000 + $85000 - $23000 = $89000

Answer No 7 = Cost of Direct Material is opening stock of Raw Material + Purchases of Material + Closing stock of raw Material

So Cost of Direct Material = $200 + $400 - $180 = $420

Answer No 9 = Sometimes overhead cost are not available  on per unit bases so to mitigated this problem estimated overhead are allocated to products based on units of material consumed or labor hour etc. As the names suggest Over allocation of overheads means expenses are allocated over and above the actual.

so answer is Actual overhead is less than allocated overhead.

Answer No 10 = As explained in q no 9 company is allocating overheads based on direct labor hours

Allocation rate per hour = $200000/25000 =$8 Per Hour

Allocated Overhead = Actual Direct Labor Hours * Allocation rate per hour

= 20000* $8 = $160000

Actual Overheads = $182000

So overhead are underallocated by $22000

Answer no 8 =