Student Name: _________________________________________ Foster School of Business Student Code of Conduct: By signing below you acknowledge that you are a part of a learning community at the Foster School of Business that is committed to the academic standards of honesty, respect, and integrity, and that you will adhere to these standards while completing this quiz. _____________________________ Student SignatureAccounting 225 Quiz 1A – Chaper 2(A) and 3(A) – January 16, 2014 Name:__________________________________________ Score:________/15 Quiz Section (Circle): Nabil Manji 10:30 11:30 Katrice Kubota-Teruya 1:30 2:30 Show ALL work on these pages, credit may not be given for correct answers with no support. Attempt all questions. True / False (0.5 point each) T/F 1. The cost of a completed job in a job-order costing system typically consists of the actual direct materials cost of the job, the actual direct labor cost of the job, and the actual manufacturing overhead cost of the job. F 2. A decrease in production will ordinarily result in an increase in fixed production costs per unit. T 3. The following journal entry would be made to apply overhead cost to jobs in a job-order costing system: F 4. In any decision making situation, differential costs are irrelevant and should be ignored. F Direct (D) or Indirect (I) (1 point each) Cost Item Cost Object D or I? 5. Salary of a Boeing 737 program manager Boeing Corp. D 6. Salary of the CEO of a company with many divisions. A specific division IMultiple Choice (1 point each) 7. The cost of leasing production equipment is classified as: A. Option A B. Option B C. Option C D. Option D 8. Which of the following is the correct formula to compute the predetermined overhead rate? A. Estimated total units in the allocation base divided by estimated total manufacturing overhead costs. B. Estimated total manufacturing overhead costs divided by estimated total units in the allocation base. C. Actual total manufacturing overhead costs divided by estimated total units in the allocation base. D. Estimated total manufacturing overhead costs divided by actual total units in the allocation base. 9. . Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behavior patterns remain unchanged the, the variable cost: A. increases on a per unit basis as the number of units produced increases. B. remains constant on a per unit basis as the number of units produced increases. C. remains the same in total as production increases. D. decreases on a per unit basis as the number of units produced increases.Problems 10. (2 points) Wolf Company uses a predetermined overhead rate based on a percentage of direct labor costs to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year: Direct materials $6,000 Direct labor $20,000 Sales commissions $9,000 Salary of production supervisor $10,000 Indirect materials $3,000 Advertising expense $9,000 Rent on factory equipment $11,000 Wolf Company estimates that 5,000 direct labor-hours and 8,000 machine-hours will be worked during the year. The predetermined overhead rate will be: Estimated MOH: 10,000+3,000+11,000=24,000 24,000/20,000=120% per direct labor cost11. (6 points) FosterCorp is a manufacturer of university branded t-shirts. In order to apply costs, FosterCorp applies $23 of manufacturing overhead based on each hour of direct labor. Direct labor cost is $8 per hour. At the beginning of December FosterCorp had the following balances in its inventory accounts: Raw Materials: $20,000 Work in Process: $48,000 Finished Goods: $30,000 During the month of December, the company purchased $18,000 in raw materials, and used $28,000 of raw materials in production. 50% of the materials used in production were direct materials. The company also incurred a total labor expense of $40,000, of which 60% was indirect labor. There was also $11,000 in other overhead expenses. At the end of the month FosterCorp had balances of: Work in Process: $52,000 Finished Goods: $12,000 Required: What is the prime cost for the month? (2 points) $_DM+DL=30,000_________________________________ What is the amount of actual overhead? (2 points) $__IM+IL+Other OH=49,000_______________________ What is the credit to finished goods inventory for the month? (2 point)