Ch.2 Practice Quiz with Answers

1. The wages of factory maintenance personnel would usually be considered to be: Manufacturing overhead Indirect labor A) No No B) Yes Yes C) Yes No D) No Yes 2. The cost of rent for a manufacturing plant is generally considered to be a: A) B) C) D) Prime cost No Yes Yes No Product cost No Yes No Yes 3. Green Company's costs for the month of August were as follows: direct materials, $27,000; direct labor, $34,000; sales salaries, $14,000; indirect labor, $10,000; indirect materials, $15,000; general corporate administrative cost, $12,000; taxes on manufacturing facility, $2,000; and rent on factory, $17,000. The beginning work in process inventory was $16,000 and the ending work in process inventory was $9,000. What was the cost of goods manufactured for the month? A) $112,000 B) $105,000 C) $132,000 D) $138,000 Use the following to answer questions 4-5: The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the just completed year. Sales Raw materials inventory, beginning Raw materials inventory, ending Purchases of raw materials Direct labor Manufacturing overhead Administrative expenses Selling expenses Work in process inventory, beginning Work in process inventory, ending Finished goods inventory, beginning Finished goods inventory, ending $910 $ 80 $ 20 $100 $130 $200 $160 $140 $ 40 $ 10 $130 $150 Use these data to answer the following series of questions. 4. A) B) C) D) The cost of goods manufactured (finished) for the year (in thousands of dollars) was: $530. $460. $520. $500. 5. A) B) C) D) The cost of goods sold for the year (in thousands of dollars) was: $650. $500. $670. $540. Page 1 6. The following costs relate to one month's activity in Martin Company: Indirect materials Rent on factory building Maintenance of equipment Direct material used Utilities on factory Direct labor Selling expense Administrative expense Work in process inventory, beginning Work in process inventory, ending Finished goods inventory, beginning Finished goods inventory, ending $ 300 500 50 1,200 250 1,500 500 300 600 800 500 250 Required: (a.) Prepare a Schedule of Cost of Goods Manufactured in good form. (b.) Determine the Cost of Goods Sold. Page 2 Answer Key -- Quiz Chapter 2 1. B Yes Yes Format: Multiple Choice Difficulty: Medium Type: (None) Origin: Chapter 2, Cost Terms, Concepts, and .......26 2. D No Yes Format: Multiple Choice Difficulty: Medium Type: CPA adapted Origin: Chapter 2, Cost Terms, Concepts, and .......18 3. A $112,000 Format: Multiple Choice Difficulty: Medium Type: (None) Origin: Chapter 2, Cost Terms, Concepts, and .......44 4. C $520. Format: Multiple Choice Difficulty: Medium Type: (None) Origin: Chapter 2, Cost Terms, Concepts, and .......71 Refer To: Ref. 2-2 5. B $500. Format: Multiple Choice Difficulty: Medium Type: (None) Origin: Chapter 2, Cost Terms, Concepts, and .......72 Refer To: Ref. 2-2 6. (a.) Direct materials Direct labor Manufacturing overhead: Indirect materials Rent Maintenance Utilities Total manufacturing costs Add: WIP, beginning $1,200 1,500 $300 500 50 250 Deduct: WIP, ending Cost of goods manufactured (b.) Finished goods, beginning Add: Cost of goods manufactured Goods available for sale Finished goods, ending Cost of goods sold Format: Essay Difficulty: Medium Type: (None) Origin: Chapter 2, Cost Terms, Concepts, and .......102 Page 3 1,100 3,800 600 4,400 800 $3,600 aaaaa $ 500 3,600 4,100 250 $3,850 aaaaa