1.

  Gabat Inc. is a merchandising company. Last month the company's

merchandise purchases totaled $67,000. The company's beginning merchandise
inventory was $19,000 and its ending merchandise inventory was $22,000. What
was the company's cost of goods sold for the month? 
    
  A. $64,000
  B. $108,000
  C. $70,000
  D. $67,000
2.   Job 593 was recently completed. The following data have been recorded on its job
cost sheet:
Direct materials $3,190
Direct labor-hours 71
Direct labor wage rate (per labor-hour) $15
Machine hours 175

The Corporation applies manufacturing overhead on the basis of machine-hours. The

predetermined overhead rate is $14 per machine-hour. What amount would be the total
cost recorded on the job cost sheet for Job 593?

    
  A. $5,249
  B. $4,255
  C. $3,219
  D. $6,705
 
3.   Garson Corporation uses the FIFO method in its process costing system. The
Grinding Department started the month with 18,000 units in its beginning work in
process inventory that were 10% complete with respect to conversion costs. An
additional 98,000 units were transferred in from the prior department during the month
to begin processing in the Grinding Department. During the month 115,000 units were
completed in the Grinding Department and transferred to the next processing
department. There were 1,000 units in the ending work in process inventory of the
Grinding Department that were 20% complete with respect to conversion costs. What
were the equivalent units for conversion costs in the Grinding Department for the
month? 
    
  A. 81,000
  B. 115,000
   C. 113,400
  D. 115,200
4.   Bagley Corporation has two service departments and two operating departments.
The space occupied by each department can be seen in the chart below.

The fixed costs of Custodial Services are allocated on the basis of square feet. If these
costs are budgeted at $38,000, what would be the amount of cost allocated to General
Administration under the direct method?

    
  A. $6,000
  B. $5,700
  C. $0
  D. $7,125
Current Year
Prior Year
Machine Hours 10,000 12,000
Maintenance Cost $24,000 $27,600

5.   Oaklis Company has provided the data shown for maintenance cost. Maintenance
cost is a mixed cost with variable and fixed components. The fixed and variable
components of maintenance cost are closest to what amounts? 
    
  A. $24,000 per year; $2.30 per machine hour
  B. $24,000 per year; $1.80 per machine hour
  C. $6,000 per year; $1.80 per machine hour
  D. $6,000 per year; $2.30 per machine hour

 
6.   Marten Corporation uses the FIFO method in its process costing system. Operating
data for the Casting Department for the month of September appear below.

According to the company's records, the conversion cost in beginning work in process
inventory was $83,600 at the beginning of September. Additional conversion costs of
$427,682 were incurred in the department during the month. What is the cost per
equivalent unit for conversion costs for September closest to? Round off to three
decimal places.

    
  A. $5.500
  B. $5.498
  C. $5.779
  D. $5.620

7.   Laurie Corporation uses the FIFO method in its process costing system.
Department A is the first stage of Laurie Corporation's production process. The
following information is available for conversion costs for the month of May for
Department A:

How many are the equivalent units of production for conversion costs for the
month? 

    
  A. 42,000 units
   B. 44,000 units
  C. 36,000 units
  D. 38,000 units
9.   A soft drink bottler incurred the following factory utility costs: $3,936 for 800 cases
bottled and $3,988 for 900 cases bottled. Factory utility cost is a mixed cost containing
both fixed and variable components. The variable factory utility cost per case bottled is
closest to 
    
  A. $4.66.
  B. $4.92.
  C. $4.43.
  D. $0.52.
10.   During October, Beidleman Inc. transferred $52,000 from Work in Process to
Finished Goods and recorded a Cost of Goods Sold of $55,000. The journal entries to
record these transactions would include a

    
  A. credit to Finished Goods of $52,000.
  B. debit to Finished Goods of $55,000.
  C. credit to Cost of Goods Sold of $55,000.
  D. credit to Work in Process of $52,000

12.   Trapp Corporation uses the weighted-average method in its process costing
system. The beginning work in process inventory in its Painting Department consisted of
3,000 units that were 70% complete with respect to materials and 60% complete with
respect to conversion costs. The cost of the beginning work in process inventory in the
department was recorded as $10,000. During the period, 9,000 units were completed
and transferred on to the next department. The costs per equivalent unit for the period
were $2.00 for material and $3.00 for conversion costs. What was the cost of units
transferred out during the month? 
    
  A. $45,400
  B. $39,600
  C. $35,400
  D. $45,000

14. There are two acceptable methods for closing out any balance of underapplied or
overapplied manufacturing overhead. One method involves allocation of the balance
among several accounts, whereas the other closes any balance directly to 
           A. Cost of Goods Manufactured.
  B. Work in Process inventory.
  C. Finished Goods inventory.
  D. Cost of Goods Sold

18.   Traves Corporation incurred $69,000 of actual Manufacturing Overhead costs

during October. During the same period, the Manufacturing Overhead applied to
Work in Process was $68,000. The journal entry to record the application of
Manufacturing Overhead to Work in Process would include a

    
  A. credit to Work in Process of $69,000.
  B. credit to Manufacturing Overhead of $68,000.
  C. debit to Work in Process of $69,000.
  D. debit to Manufacturing Overhead of $68,000.
20.   When the activity level declines within the relevant range, what should
happen with respect to the fixed and variable costs per unit? 
    
  A. The variable cost per unit increases and the fixed cost per unit doesn't change.
  B. Both the fixed and variable costs per unit increase.
  C. The fixed cost per unit increases and the variable cost per unit doesn't change.
  D. Neither the fixed nor variable costs per unit change.