Reference no: EM132772707
Questions -
Q1. The accounting records of Turner Industries, a manufacturer of flash drives, shows the following costs for the year ended December 31, 2011.
Direct materials $700,000
Direct labour 220,000
Indirect materials 100,000
Indirect labour 135,000
Variable overhead 220,000
Fixed overhead 325,000
Variable selling costs 100,000
Fixed S&A costs 185,000
The amount of prime costs incurred in 2011 were
a. $920,000
b. $1,240,000
c. $765,000
d. $1,140,000
Q2. Ariana Corp. makes pencils. The actual and budgeted overhead for the year was $350,000. The company produced 5,000,000 pencils during the year and sold 4,760,000 pencils. The cost per batch of 1,000 pencils is as follows:
Direct materials $20
Direct labour $10
Variable overhead $5
What is the cost per batch of pencils if variable costing is used?
a. $45
b. $109
c. $105
d. $35
Q3. Andy's Office Warehouse makes office chairs. The following information was reported for year ended 2011.
Total sales $2,300,000
Direct materials $20 per chair
Direct labour $25 per chair
Variable overhead $18 per chair
Fixed overhead $665,000
Selling and admin. costs $124,000
Total production 19,000
Sales 18,400
The operating profit for 2011 using absorption costing would be
a. $314,000
b. $372,800
c. $351,800
d. $360,800
Q4. Use the following costs per unit to identify the total product cost and conversion cost per unit:
$ per unit
Direct materials 12
Indirect materials 6
Direct labour 24
Indirect labour 8
Other variable overhead costs 10
Variable selling expense 5
Fixed production overhead 12
Fixed S&A expense 8
a. Product cost: $46; Conversion cost: $34
b. Product cost: $58; Conversion cost: $34
c. Product cost: $46; Conversion cost: $46
d. Product cost: $72; Conversion cost: $54
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