Stugy Guide free essay sample

The cost of leasing production equipment is classified as: Prime Cost: NoProduct Cost: Yes The wages of factory maintenance personnel would usually be considered to be: Indirect Labor: Yes Manufacturing OH: Yes Manufacturing overhead consists of: all manufacturing costs, except direct materials and direct labor. Which of the following costs would not be included as part of manufacturing overhead? Insurance on sales vehicles Conversion costs consist of which of the following: Direct labor and manufacturing overhead cost. Each of the following would be a period cost except: depreciation of a machine used in manufacturing. Within the relevant range, variable cost per unit will: Remain constant. The term â€Å"relevant range† means the range of activity over which: the assumptions about fixed and variable cost behavior are reasonably valid. In describing the cost formula equation Y = a + bX, which of the following statements is correct? â€Å"a† is the fixed component. Which of the following costs is often important in decision making, but is omitted from conventional accounting records? Opportunity Costs. We will write a custom essay sample on Stugy Guide or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Gambrini Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $197. 80 per unit. Sales volume (units) 6,000 7,000 Cost of sales $486,000 $567,700 Selling and administrative costs $612,600 $624,400 The best estimate of the total monthly fixed cost is: $541,800 Edeen Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. Production volume 5,000 units 6,000 units Direct materials $311,000 $373,200 Direct labor $171,500 $205,800 Manufacturing overhead $415,000 $427,800 The best estimate of the total variable manufacturing cost per unit is: $109. 30 At an activity level of 9,200 machine-hours in a month, Nooner Corporation’s total variable production engineering cost is $761,300 and its total fixed production engineering cost is $154,008. What would be the total production engineering cost per unit, both fixed and variable, at an activity level of 9,300 machine-hours in a month? Assume that this level of activity is within the relevant range. $99. 31 Jumpst Corporation uses the cost formula Y = $3,600 + $0.30X for the maintenance cost in Department B, where X is machine-hours. The August budget is based on 20,000 hours of planned machine time. Maintenance cost expected to be incurred during August is: $9600 Given the cost formula, Y = $9,000 + $2. 50X, total cost for an activity level of 3,000 units would be: $16500 Nikkel Corporation, a merchandising company, reported the following results for July: S ales $402,800 Cost of goods sold (all variable) $169,100 Total variable selling expense $17,100 Total fixed selling expense $14,200 Total variable administrative expense $7,600 Total fixed administrative expense $30,100 The gross margin for July is: $233,700 The contribution margin for July is: $209,000 Temblador Corporation purchased a machine 7 years ago for $319,000 when it launched product E26T. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 330 machine costing $323,000 or by a new model 230 machine costing $285,000. Management has decided to buy the model 230 machine. It has less capacity than the model 330 machine, but its capacity is sufficient to continue making product E26T. Management also considered, but rejected, the alternative of dropping product E26T and not replacing the old machine. If that were done, the $285,000 invested in the new machine could instead have been invested in a project that would have returned a total of $386,000. In making the decision to buy the model 230 machine rather than the model 330 machine, the differential cost was: $38,000 Temblador Corporation purchased a machine 7 years ago for $319,000 when it launched product E26T. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 330 machine costing $323,000 or by a new model 230 machine costing $285,000. Management has decided to buy the model 230 machine. It has less capacity than the model 330 machine, but its capacity is sufficient to continue making product E26T. Management also considered, but rejected, the alternative of dropping product E26T and not replacing the old machine. If that were done, the $285,000 invested in the new machine could instead have been invested in a project that would have returned a total of $386,000. In making the decision to buy the model 230 machine rather than the model 330 machine, the sunk cost was: $319,000 Temblador Corporation purchased a machine 7 years ago for $319,000 when it launched product E26T. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 330 machine costing $323,000 or by a new model 230 machine costing $285,000. Management has decided to buy the model 230 machine. It has less capacity than the model 330 machine, but its capacity is sufficient to continue making product E26T. Management also considered, but rejected, the alternative of dropping product E26T and not replacing the old machine. If that were done, the $285,000 invested in the new machine could instead have been invested in a project that would have returned a total of $386,000. In making the decision to invest in the model 230 machine, the opportunity cost was: $386,000 Which of the following is the correct formula to compute the predetermined overhead rate? Estimated total manufacturing overhead costs divided by estimated total units in the allocation base. What document is used to determine the actual amount of direct labor to record on a job cost sheet? Time Ticket The balance in the Work in Process account equals: the balances on the job cost sheets of uncompleted jobs. Martinez Aerospace Company uses a job-order costing system. The direct materials for Job #045391 were purchase in July and put into production in August. The job was not completed by the end of August. At the end of August, in what account would the direct material cost assigned to Job #045391 be located? Work in Process Inventory Over-applied manufacturing overhead occurs when: applied overhead exceeds actual overhead. Crinks Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 11,200 hours and the total estimated manufacturing overhead was $259,840. At the end of the year, actual direct labor-hours for the year were 10,800 hours and the actual manufacturing overhead for the year was $254,840. Overhead at the end of the year was: $4280 Under-applied Malcolm Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. On September 1, the estimates for the month were: Manufacturing overhead $17,000 Direct labor-hours 13,600 During September, the actual results were: Manufacturing overhead $18,500 Direct labor-hours 12,000 The cost records for September will show: Underapplied overhead of $3,500 Compton Company uses a predetermined overhead rate in applying overhead to production orders on a labor cost basis in Department A and on a machine-hours basis in Department B. At the beginning of the most recently completed year, the company made the following estimates: Dept. A Dept. B Direct labor cost $56,000 $33,000 Manufacturing overhead $67,000  $45,000 Direct labor-hours 8,000 9,000 Machine-hours 4,000 15,000 What predetermined overhead rate would be used in Department A and Department B, respectively? 120% and $3 The Collins Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and machine-hours in Dept. B. At the beginning of the year, the company made the following estimates: Dept. A Dept. B Direct labor cost $65,000 $42,000 Manufacturing overhead $91,000 $48,000 Direct labor-hours 8,000 10,000 Machine-hours 3,000 12,000 What predetermined overhead rate would be used in Dept A and Dept B, respectively? 140% and $4. 00 Simoneaux Corporation bases its predetermined overhead rate on the estimated machine-hours of the upcoming year. At the beginning of the most recently completed year, the company estimated the machine-hours for the upcoming year at 22,000 machine-hours. The estimated variable manufacturing overhead was $8. 65 per machine-hour and the estimated total fixed manufacturing overhead was $609,400. The predetermined overhead rate for the recently completed year was closest to: $36.  35 per machine-hour Job 731 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $2,391 Direct labor-hours 69 labor-hours Direct labor wage rate $13 per labor-hour Machine-hours 129 machine-hours The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 731 would be: $5,094 The Donaldson Company uses a job-order costing system. The following data were recorded for July: Job Number