Use the following to answer questions 1-3: A partial listing of costs incurred at Archut Corporation during September appears below: Direct materials $113,000 Utilities, factory $5,000 Administrative salaries $81,000 Indirect labor $25,000 Sales commissions $48,000 Depreciation of production equipment $20,000 Depreciation of administrative equipment $30,000 Direct labor $129,000 Advertising $135,000 1. The total of the manufacturing overhead costs listed above for September is: A) $586,000 B) $50,000 C) $292,000 D) $30,000 2. The total of the product costs listed above for September is: A) $292,000 B) $294,000 C) $50,000 D) $586,000 3. The total of the period costs listed above for September is: A) $294,000 B) $344,000 C) $292,000 D) $50,000 Use the following to answer questions 4-5: Boardman Company reported the following data for the month of January: Inventories: 1/1 1/31 Raw materials $32,000 $31,000 Work in process $18,000 $12,000 Finished goods $30,000 $35,000 Additional information: Sales revenue $210,000 Direct labor costs $40,000 Manufacturing overhead costs $70,000 Selling expenses $25,000 Administrative expenses $35,000 4. If raw materials costing $35,000 were purchased during January, the total manufacturing costs for the month would be: A) $145,000 B) $144,000 C) $151,000 D) $146,000 5. Boardman Company's total conversion cost for January would be: A) $110,000 B) $170,000 C) $135,000 D) $130,000 Use the following to answer questions 6-7: Management of Mcgibboney Corporation has asked your help as an intern in preparing some key reports for November. The beginning balance in the raw materials inventory account was $25,000. During the month, the company made raw materials purchases amounting to $54,000. At the end of the month, the balance in the raw materials inventory account was $37,000. Direct labor cost was $25,000 and manufacturing overhead cost was $62,000. The beginning balance in the work in process account was $22,000 and the ending balance was $23,000. The beginning balance in the finished goods account was $44,000 and the ending balance was $50,000. Selling expense was $21,000 and administrative expense was $38,000. 6. The conversion cost for November was: A) $116,000 B) $79,000 C) $87,000 D) $129,000 7. The prime cost for November was: A) $79,000 B) $59,000 C) $67,000 D) $87,000 8. Indirect labor is part of: A) Prime cost B) Conversion cost C) Period cost D) Nonmanufacturing cost The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n): A) period cost B) direct material cost C) indirect material cost D) none of the above Property taxes on a company’s factory building would be classified as a(n): A) product cost B) opportunity cost C) period cost D) variable cost 9. Elliott Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company manufactures tools to customer specifications. The following data pertain to Job 1501: Direct materials used $4,200 Direct labor-hours worked 300 Direct labor rate per hour $8.00 Machine-hours used 200 Predetermined overhead rate per machine-hour $15.00 What is the total manufacturing cost recorded on Job 1501? A) $8,800 B) $9,600 C) $10,300 D) $11,100 10. Avery Co. uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. For the month of October, Avery's estimated manufacturing overhead cost was $300,000 based on an estimated activity level of 100,000 direct labor-hours. Actual overhead amounted to $325,000 with actual direct labor-hours totaling 110,000 for the month. How much was the overapplied or underapplied overhead? A) $25,000 overapplied B) $25,000 underapplied C) $5,000 overapplied D) $5,000 underapplied 11. Woodman Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Estimated and actual data for direct labor and manufacturing overhead for last year are as follows: Estimated Actual Direct labor-hours 600,000 550,000 Manufacturing overhead $720,000 $680,000 The manufacturing overhead for Woodman Company for last year was: A) overapplied by $20,000 B) overapplied by $40,000 C) underapplied by $20,000 D) underapplied by $40,000 12. Reamer Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year: Direct materials $1,000 Direct labor $3,000 Sales commissions $4,000 Salary of production supervisor $2,000 Indirect materials $400 Advertising expense $800 Rent on factory equipment $1,000 Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $6.80 B) $6.00 C) $3.00 D) $3.40 13. The management of the Medulla Fitness Club believes that the attendance by its members is an appropriate activity measure for total operating cost. Shown below are attendance figures and total operating costs for the past six months: Members Attendance Operating Cost Jan Feb Mar Apr May Jun 150,000 130,000 160,000 120,000 170,000 190,000 $786,000 $735,000 $792,000 $706,000 $799,000 $874,000 Assume that the relevant range includes all of the activity levels mentioned in this problem. a) Find the estimate cost equation using the high-low method; b) If Medulla expects to have 180,000 members attend the club in July, what will be the estimated total operating cost?
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