ManMANUFACTURING CONCERN

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____ 1. All of the following phrases are used as alternate terminology for "factory overhead" except:
a. manufacturing expense c. factory expense
b. indirect manufacturing cost d. other expense

____ 2. Direct materials and direct labor are considered to be:

a. selling expenses c. conversion costs
b. prime costs d. factory overhead

____ 3. Depreciation on factory buildings and equipment is classified as:

a. selling expense c. factory overhead
b. administrative expense d. indirect materials

____ 4. A typical marketing expense is:

a. freight out c. audit fees
b. indirect labor d. uncollectible accounts expense
____ 5. A typical indirect labor cost for a manufacturer is:
a. sales office salaries c. factory insurance
b. freight out d. materials handling

____ 6. The term "prime costs" refers to:

a. the sum of direct labor costs and all factory overhead costs
b. the sum of direct materials costs and direct labor costs
c. manufacturing costs incurred to produce units of output
d. all costs associated with manufacturing other than direct labor and direct materials
costs
____ 7. The term "conversion costs" refers to:
a. costs that are associated with marketing, shipping, warehousing, and billing activities
b. the sum of direct labor costs and all factory overhead costs
c. the sum of direct materials costs and direct labor costs
d. manufacturing costs incurred to produce units of output

____ 8. Wages paid to factory machine operators of a manufacturing plant are an element of:
a. Prime Cost: Yes; Conversion Cost: No
b. Prime Cost: Yes; Conversion Cost: Yes
c. Prime Cost: No; Conversion Cost: No
d. Prime Cost: No; Conversion Cost: Yes

____ 9. Product cost

a. Prime cost + Manufacturing overhead c. Direct Materials + Factory overhed
b. Prime cost + Conversion cost d. Gross Profit - Operating expense
____ 10. Period cost
a. Administrative expenses + General Expenses
b. Administrative expenses + Factory overhead
c. General Expenses + Distribution expenses
d. Distribution expenses + Selling expenses

____ 11. Estimated factory overhead is P600,000, and the hours usage of machinery is expected to be 150,000.
Factory overhead is applied at the rate of P10 per direct labor hour. The wage rate for direct labor is P6
per hour, and the total number of estimated direct labor hours for the period is:
a. 600,000 c. 300,000
b. 150,000 d. 60,000
____ 12. Pitino Company has a beginning inventory of direct materials on March 1 of P30,000 and an ending
inventory on March 31 of P36,000. The following additional manufacturing cost data were available for
the month of March:

Direct materials purchased ................................................. P84,000

Direct labor .................................................................... 60,000
Factory overhead.............................................................. 80,000

During March, prime cost added to production was:

a. P140,000 c. P144,000
b. P138,000 d. P150,000

____ 13. Given the following data:

Direct materials $35,000

Direct labor $13,000
Manufacturing overhead $15,000
Selling expenses $14,000
Administrative expenses $30,000

Prime costs during the month totaled:

a. $48,000 c. $107,000
b. $28,000 d. $ 63,000
____ 14. Ogden Company had $300,000 overhead cost at 20,000 machine hours, $320,000 overhead cost at 25,000
hours. Variable overhead cost per machine hour is
a. $ 4.00. c. $15.00.
b. $12.80. d. some other number.

____ 15. Using the following data for a recent period, calculate the beginning finished goods inventory:

Sales $40,000
Beginning finished goods inventory ?
Cost of goods manufactured 16,000
Ending finished goods inventory 5,000
Cost of goods sold ?
Gross margin 17,000
Administrative and selling expenses ?
Net operating income 10,000

The beginning finished goods inventory was:

a. $24,000 c. $7,000
b. $23,000 d. $12,000
____ 16. The following costs were incurred in July:

Direct materials $35,000

Direct labor 13,000
Manufacturing overhead 15,000
Selling expenses 14,000
Administrative expenses 0,000

Prime costs during the month totaled:

a. $48,000 c. $107,000
b. $28,000 d. $63,000
____ 17. Abel Company's manufacturing overhead is 20% of its total conversion costs. If direct labor is $38,000 and if
direct materials are $47,000, the manufacturing overhead is:
 a. $152,000 c. $21,250
b. $11,750 d. $9,500

The following data pertain to Graham Company's operations in May:

May 1 May 31
Work in process inventory $7,000 12,000
Raw materials inventory 15,000 ?
Finished goods inventory ? 20,000

Other data:
Raw materials used P40,000
Sales P200,000
Cost of goods manufactured P135,000
Manufacturing overhead cost P60,000
Raw materials purchases P30,000
Gross Margin P60,000

____ 18. The ending materials inventory was:

a. $5,000 c. $15,000
b. $10,000 d. $20,000
____ 19. The beginning finished goods inventory was:
a. $5,000 c. $25,000
b. $15,000 d. $30,000
____ 20. The direct labor cost for May was:
a. $35,000 c. $30,000
b. $40,000 d. $25,000

Demeglio Corporation reported the following data for the month of September:

Inventories: Beginning Ending

Raw materials $30,000 $34,000
Work in process $23,000 $22,000
Finished goods $32,000 $35,000

____ 21. If the raw materials purchased during September totaled $63,000, what was the cost of the raw materials
used in production for the month?
a. $67,000 c. $59,000
b. $63,000 d. $64,000
____ 22. If the company transferred $222,000 of completed goods from work in process to finished goods inventory
during September, what was the cost of goods sold for the month?
a. $219,000 c. $222,000
b. $225,000 d. $221,000

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 P40,000
 Manufacturing overhead costs P70,000
Selling expenses P25,000
Administrative expenses P35,000

____ 23. If raw materials costing $35,000 were purchased during January, the total manufacturing costs for the
month would be:
a. $145,000 c. $151,000
b. $144,000 d. $146,000
____ 24. Boardman Company's total conversion cost for January would be:
a. $110,000 c. $135,000
b. $170,000 d. $130,000

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.

____ 25. The conversion cost for November was:

a. $116,000 c. $87,000
b. $79,000 d. $129,000
____ 26. The prime cost for November was:
a. $79,000 c. $67,000
b. $59,000 d. $87,000

The following data (in thousands of pesos) have been taken from the accounting records of Karling
Corporation for the just completed year.

Sales $990
Raw materials inventory, beginning $40
Raw materials inventory, ending $70
Purchases of raw materials $120
Direct labor $200
Manufacturing overhead $230
Administrative expenses $150
Selling expenses $140
Work in process inventory, beginning $70
Work in process inventory, ending $50
Finished goods inventory, beginning $120
Finished goods inventory, ending $160

____ 27. The cost of the raw materials used in production during the year (in thousands of pesos) was:
a. $190 c. $150
b. $90 d. $160

____ 28. The cost of goods manufactured (finished) for the year (in thousands of pesos) was:
a. $540 c. $570
b. $500 d. $590

____ 29. The cost of goods sold for the year (in thousands of pesos) was:
a. $700 c. $660
b. $500 d. $580

____ 30. The net operating income for the year (in thousands of pesos) was:
 a. $150 c. $490
b. $200 d. $250

Dauenhauer Corporation reported the following data for the month of April:

Inventories: Beginning Ending

Raw materials $27,000 $20,000
Work in process $10,000 $24,000
Finished goods $38,000 $28,000

Additional information:
Sales $230,000
Raw materials purchases 76,000
Direct labor cost 30,000
Manufacturing overhead cost 61,000
Selling expense 22,000
Administrative expense 26,000

____ 31. The total manufacturing cost for April was:

a. $61,000 c. $91,000
b. $167,000 d. $174,000
____ 32. The cost of goods manufactured for April was:
a. $160,000 c. $167,000
b. $174,000 d. $188,000
____ 33. The cost of goods sold for April was:
a. $240,000 c. $150,000
b. $170,000 d. $113,000
____ 34. The net operating income for April was:
a. $60,000 c. $12,000
b. $15,000 d. $91,000
____ 35. Juart Corporation reported the following data for the month of December:

Inventories: Beginning Ending

Raw materials $26,000 $38,000
Work in process $22,000 $21,000
Finished goods $54,000 $56,000

Additional information:
Sales $230,000
Raw materials purchases 78,000
Direct labor cost 24,000
Manufacturing overhead cost 58,000
Selling expense 15,000
Administrative expense 45,000

The cost of goods sold for December was:

a. $147,000 c. $228,000
b. $97,000 d. $151,000
MANUFACTURING CONCERN
Answer Section

MULTIPLE CHOICE

1. D
2. B
3. C
4. A
5. D
6. B
7. B
8. B
9. A
10. C
11. D
12. B
13. A
14. A
15. D
16. A
17. D
18. A
19. C
20. B
21. C
22. A
23. D
24. A
25. C
26. C
27. B
28. A
29. B
30. B
31. D
32. A
33. B
34. C
35. A