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Questions
Q:
Leon Production produces steel rivets for the shipbuilding business. Leon uses the target pricing approach. The company's objective is to achieve gross profit equal to 25% of selling price. Other data are shown below:
Current production cost $112 per carton
Current market price $130 per carton
What must the company do to achieve their profit goal? (Please round all amounts to the nearest cent.)
A) Reduce production cost from $112 to $110.00.
B) Reduce production cost from $112 to $97.50.
C) Reduce production cost from $112 to $101.25.
D) Reduce production cost from $112 to $99.00.
Q:
Appalachee Company produces gaskets for the automotive industry. Current production cost is $3.50 per gross. There is a highly competitive market for the product, and Appalachee currently uses a target pricing approach. Currently, equivalent products are selling for $4.75 per gross. Apalachee wishes to earn a minimum of a 40% markup over cost. What would be their most appropriate response? (Please round all amounts to the nearest cent.)
A) Reduce production cost by $0.11 per gross.
B) Reduce production cost by $0.05 per gross.
C) Increase price to $4.90 per gross.
D) Increase price to $4.85.
Q:
Torreya Company produces gaskets for the automotive industry. Current production cost is $4.50 per carton of 100. There is a highly competitive market for the product, and Torreya currently uses a target pricing approach. Currently, equivalent products are selling for $5.90 per carton. Torreya wishes to earn a minimum of a 30% markup over cost. What would be their most appropriate response?
A) To raise the price to $5.95 per carton
B) To change over to cost plus pricing
C) To mark the price down to $5.80 per carton
D) To stop producing this product because they cannot earn the required amount of profit
Q:
Arnold Company produces handheld calculators, and their manufacturing cost is currently $5.80 per unit. The company also has non-manufacturing costs of $1.20 per unit. Arnold employs target pricing strategy, and the current market price is $8.00 per unit. If Arnold wishes to price their product at a 25% markup over full-product cost, what must they do?
A) Price the product at $8.75 per unit.
B) Reduce full-product cost by $0.20.
C) Reduce full-product cost by $0.60.
D) Reduce the non-manufacturing cost by 25%.
Q:
Bakersfield Manufacturing produces agricultural tools including a hand tiller. Their current full-product cost for a hand tiller is $20. Bakersfield wishes to make a 15% profit on the selling price. Bakersfield uses a target pricing strategy. The current competitive market price for this product is $22.00. What would be the most appropriate response to this situation?
A) Employ cost plus pricing.
B) Carry out value engineering study.
C) Expand production facilities.
D) Strengthen internal controls.
Q:
Bakersfield Manufacturing produces agricultural tools including a hand tiller. Their current full-product cost for a hand tiller is $20. Bakersfield wishes to make a 15% profit on the selling price. Bakersfield uses a target pricing strategy. The current competitive market price for this product is $22. What does Bakersfield have to do to achieve their profit objective?
A) Reduce full-product cost by $1.30.
B) Reduce full-product cost by $3.00.
C) Reduce full-product cost by $2.70.
D) Reduce full-product cost by $11.25.
Q:
Which of the following describes full-product cost?
A) All production costs plus all non-manufacturing costs
B) All production costs
C) Direct materials plus direct labor cost
D) Manufacturing overhead plus non-manufacturing cost
Q:
Ganges Company makes bulk burlap by the ton. Currently, their manufacturing cost is $215 per unit, and their non-manufacturing cost is $40 per unit. The going market price of the product is $300. Ganges uses
the target price and target cost methodology. If they desire to make a profit of 20% on the price, what must they do?
A) Increase the advertising costs by $15 per unit.
B) Reduce the price they charge by $15 per unit.
C) Reduce the full-product cost by $60 per unit.
D) Reduce the full-product cost by $15 per unit.
Q:
What is value engineering?
A) Reevaluating market strategies to create a more valuable product
B) Estimating the value added of the engineering processes
C) Reevaluating production activities to reduce costs
D) Estimating the value of the end product
Q:
Lisbon Manufacturing is considering the manufacture of a new product. Lisbon was hoping to sell the product for $588 per unit and estimated the total cost per unit to be $420. Lisbon conducted market research and found out that the market is only willing to pay $539 for the new product. Using the target costing approach, what does the total per unit cost of the new product have to be if Lisbon wants to achieve a 40% markup on total cost?
A) $215.60
B) $385.00
C) $257.60
D) $420.00
Q:
Percival Company wishes to sell wooden beams to home builders. The current market price of the beams is $950, and Percival knows it must accept the market price. Currently, the beams cost Percival $809 to produce. The company wishes to make a profit equal to 16% of the price. Which of the following strategies would help Percival accomplish their objective?
A) Increase the production cost by $22 per unit.
B) Increase the volume of sales.
C) Increase the sales price to $961.
D) Reduce production costs by $11 per unit.
Q:
Equival Company wishes to sell truck axles to car manufacturers. The current market price of the axles is $400, and Equival knows it must accept the market price. Currently, it costs the company $330 to produce each axle. The company wishes to make a profit equal to 20% of the price. Which of the following strategies should Equival adopt to achieve its objective?
A) Raise the price to $410.
B) Reduce its production costs by $10 per unit.
C) Increase the production costs by $20 per unit.
D) Use advertising to increase the volume of sales.
Q:
Percival Company wishes to sell wooden beams to home builders. The current market price of the beams is $950, and Percival knows it must accept the market price. The company wishes to make a profit equal to 16% of the price. Using target costing, the company will have to design the production process to meet this requirement. What is the desired target cost per beam?
A) $798
B) $1,062
C) $152
D) $800
Q:
Equival Company wishes to sell truck axles to car manufacturers. The current market price of the axles is $400, and Equival knows it must accept the market price. The company wishes to make a profit equal to 20% of the price. Using target costing, Equival will have to design the production process to meet this requirement. What is the desired target cost per axle?
A) $320
B) $480
C) $420
D) $380
Q:
Madrid Manufacturing is considering the manufacture of a new product. Madrid was hoping to sell the product for $504 per unit and estimated the total cost per unit to be $360. Madrid conducted market research and found out that the market is only willing to pay $462 for the new product. Using the target costing approach, how much will Madrid have to reduce the production cost in order to achieve the same amount of gross profit as originally planned?
A) $47
B) $31
C) $30
D) $42
Q:
Rankin Food Products produces cane sugar syrup in bulk quantities and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. Using process costing analysis, Rankin determined that the cost of the units completed and transferred out of the Refining Department during the month was $20,000. Which of the following is the correct journal entry to record the cost of the units completed and transferred out to the next department?
A) Debit $20,000 to Work in process Refining, credit $20,000 to Work in process - Packaging
B) Debit $20,000 to Work in process Refining, credit $20,000 to Work in process - Mixing
C) Debit $20,000 to Work in process Packaging, credit $20,000 to Work in process - Refining
D) Debit $20,000 to Work in process Packaging, credit $20,000 to Finished goods
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below.
Refining Department, beginning balance at January 1, 2012
Quantity: 2,000 units (partially processed)
Cost: $15,600 of costs transferred in
$1,900 of materials cost
$4,500 of conversion cost
$22,000 total account balance
Costs added during January
Cost of units transferred in: $222,400
Direct materials cost $45,000
Conversion cost $93,750
Refining Department, ending balance at January 31, 2012
Quantity: 5,000 units (partially processed)
% completion for materials cost: 90%
% completion for conversion cost: 75%
Please perform a process costing analysis and answer the following question:
For the Refining Department in the month of January, what was the total cost of ending inventory? (Please round to nearest whole dollar.)
A) $35,000
B) $52,550
C) $46,250
D) $33,600
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below.
Refining Department, beginning balance at January 1, 2012
Quantity: 2,000 units (partially processed)
Cost: $15,600 of costs transferred in
$1,900 of materials cost
$4,500 of conversion cost
$22,000 total account balance
Costs added during January
Cost of units transferred in: $222,400
Direct materials cost $45,000
Conversion cost $93,750
Refining Department, ending balance at January 31, 2012
Quantity: 5,000 units (partially processed)
% completion for materials cost: 90%
% completion for conversion cost: 75%
Please perform a process costing analysis and answer the following question:
For the Refining Department in the month of January, what was the total cost of product completed and transferred out? (Please round to nearest whole dollar.)
A) $238,000
B) $383,150
C) $52,550
D) $330,600
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below.
Refining Department, beginning balance at January 1, 2012
Quantity: 2,000 units (partially processed)
Cost: $15,600 of costs transferred in
$1,900 of materials cost
$4,500 of conversion cost
$22,000 total account balance
Costs added during January
Cost of units transferred in: $222,400
Direct materials cost $45,000
Conversion cost $93,750
Refining Department, ending balance at January 31, 2012
Quantity: 5,000 units (partially processed)
% completion for materials cost: 90%
% completion for conversion cost: 75%
Please perform a process costing analysis and answer the following question:
For the Refining Department in the month of January, what was cost per equivalent unit with respect to conversion costs? (Please round to nearest cent.)
A) $1.40
B) $3.00
C) $1.34
D) $2.86
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below.
Refining Department, beginning balance at January 1, 2012
Quantity: 2,000 units (partially processed)
Cost: $15,600 of costs transferred in
$1,900 of materials cost
$4,500 of conversion cost
$22,000 total account balance
Costs added during January
Cost of units transferred in: $222,400
Direct materials cost $45,000
Conversion cost $93,750
Refining Department, ending balance at January 31, 2012
Quantity: 5,000 units (partially processed)
% completion for materials cost: 90%
% completion for conversion cost: 75%
Please perform a process costing analysis and answer the following question:
For the Refining Department in the month of January, what was cost per equivalent unit with respect to direct materials costs? (Please round to nearest cent.)
A) $1.40
B) $3.00
C) $1.34
D) $7.00
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below.
Refining Department, beginning balance at January 1, 2012
Quantity: 2,000 units (partially processed)
Cost: $15,600 of costs transferred in
$1,900 of materials cost
$4,500 of conversion cost
$22,000 total account balance
Costs added during January
Cost of units transferred in: $222,400
Direct materials cost $45,000
Conversion cost $93,750
Refining Department, ending balance at January 31, 2012
Quantity: 5,000 units (partially processed)
% completion for materials cost: 90%
% completion for conversion cost: 75%
Please perform a process costing analysis and answer the following question:
For the Refining Department in the month of January, what was cost per equivalent unit with respect to transferred in costs? (Please round to nearest cent.)
A) $6.54
B) $3.00
C) $1.40
D) $7.00
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below.
Refining Department, beginning balance at January 1, 2012
Quantity: 2,000 units (partially processed)
Cost: $15,600 of costs transferred in
$1,900 of materials cost
$4,500 of conversion cost
$22,000 total account balance
Costs added during January
Cost of units transferred in: $222,400
Direct materials cost $45,000
Conversion cost $93,750
Refining Department, ending balance at January 31, 2012
Quantity: 5,000 units (partially processed)
% completion for materials cost: 90%
% completion for conversion cost: 75%
Please perform a process costing analysis and answer the following question:
For the Refining Department in the month of January, what was the total number of equivalent units with respect to conversion costs?
A) 3,750
B) 32,750
C) 29,000
D) 4,500
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below.
Refining Department, beginning balance at January 1, 2012
Quantity: 2,000 units (partially processed)
Cost: $15,600 of costs transferred in
$1,900 of materials cost
$4,500 of conversion cost
$22,000 total account balance
Costs added during January
Cost of units transferred in: $222,400
Direct materials cost $45,000
Conversion cost $93,750
Refining Department, ending balance at January 31, 2012
Quantity: 5,000 units (partially processed)
% completion for materials cost: 90%
% completion for conversion cost: 75%
Please perform a process costing analysis and answer the following question:
For the Refining Department in the month of January, what was the total number of equivalent units with respect to direct materials costs?
A) 33,500
B) 34,000
C) 29,000
D) 4,500
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below.
Refining Department, beginning balance at January 1, 2012
Quantity: 2,000 units (partially processed)
Cost: $15,600 of costs transferred in
$1,900 of materials cost
$4,500 of conversion cost
$22,000 total account balance
Costs added during January
Cost of units transferred in: $222,400
Direct materials cost $45,000
Conversion cost $93,750
Refining Department, ending balance at January 31, 2012
Quantity: 5,000 units (partially processed)
% completion for materials cost: 90%
% completion for conversion cost: 75%
Please perform a process costing analysis and answer the following question:
For the Refining Department in the month of January, what was the total number of equivalent units with respect to transferred in costs?
A) 32,000
B) 34,000
C) 29,000
D) 5,000
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process.
During January, the Mixing Department incurred $48,000 in direct materials costs and $211,600 in conversion costs. At the end of the month, the ending inventory in the Mixing Department was 60% complete with respect to conversion costs. First, calculate the equivalent units, then calculate the cost per equivalent unit, and then calculate the total cost of the product that was completed and transferred out during January.
The total cost of product transferred out was:
A) $211,600.
B) $48,000.
C) $37,200.
D) $222,400.
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process.
During January, the Mixing Department incurred $48,000 in direct materials costs and $211,600 in conversion costs. At the end of the month, the ending inventory in the Mixing Department was 60% complete with respect to conversion costs. First, calculate the equivalent units, then calculate the cost per equivalent unit, and then calculate the total cost of the product that was remaining in ending inventory at January 31.
The total cost of product in ending inventory was:
A) $211,600.
B) $48,000.
C) $37,200.
D) $222,400.
Q:
Q:
Rankin Food Products produces cane sugar syrup in bulk quantities, and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. Using process costing analysis, Rankin determined that the cost of the units completed and transferred out of the Mixing Department during the month was $11,000. Which of the following is the correct journal entry to record the cost of the units completed and transferred out to the next department?
A) Debit $11,000 to Finished goods inventory, credit $11,000 to Work in process - Mixing
B) Debit $11,000 to Work in process Refining, credit $11,000 to Work in process - Mixing
C) Debit $11,000 to Work in process Refining, credit $11,000 to Materials inventory
D) Debit $11,000 to Work in process Mixing, credit $11,000 to Work in process - Refining
Q:
Q:
Q:
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process.
At the end of the month, LDR calculated equivalent units. The ending inventory in the Mixing Department was 60% complete with respect to conversion costs. With respect to conversion costs, how many equivalent units were calculated for the product that was completed, and how many equivalent units were calculated for the ending balance?
A) 32,000 equivalent units and 4,800 equivalent units
B) 32,000 equivalent units and 8,000 equivalent units
C) 19,200 equivalent units and 4,800 equivalent units
D) 40,000 equivalent units, and 8,000 equivalent units
Q:
LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departmentsue004Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process.
At the end of the month, LDR calculated equivalent units. The ending inventory in the Mixing Department was 60% complete with respect to conversion costs. With respect to direct materials costs, how many equivalent units were calculated for the product that was completed, and how many equivalent units were calculated for the ending balance?
A) 32,000 equivalent units and 4,800 equivalent units
B) 32,000 equivalent units and 8,000 equivalent units
C) 19,200 equivalent units and 4,800 equivalent units
D) 40,000 equivalent units, and 8,000 equivalent units
Q:
Which of the following best describes the term equivalent units?
A) Partially completed units counted in terms of the equivalent number of completed units
B) Partially completed units that will be sold as is
C) Different types of units that can be used for the equivalent purpose or length of time as other units
D) Different products that have the same selling price
Q:
In a process costing system, calculating the cost per unit is used for a number of purposes. Which of the following is NOT one of those purposes?
A) To set selling prices
B) To manage and control administrative expenses
C) To manage and control production costs
D) To calculate the ending work in process inventory
Q:
If there are 500 units in Department 1 Work in process account at the end of the month, and they are 80% complete with respect to conversion costs, they would be accounted for as 400 equivalent units with respect to conversion costs.
Q:
In a process costing system, equivalent units must be calculated separately for materials and conversion costs.
Q:
In a process costing system, direct materials costs are normally assumed to be incurred evenly throughout the production process.
Q:
In a process costing system, conversion costs are normally assumed to be incurred evenly throughout the production process.
Q:
In a process costing system, each department has its own Work in process account.
Q:
Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800.
A new client is contracting with Fogelin to promote a ballet tour in the U.S. Fogelin estimates that the job will require 40 billable hours of specialist time. If Fogelin wishes to make a 25% gross profit on the job, what price should Fogelin quote to the client?
A) $2,800
B) $6,000
C) $7,500
D) $4,700
Q:
Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800.
In June, Fogelin signed a contract for a Russian ballet performance. They negotiated a price of $6,400 for their services. When the job was complete, Fogelin's records showed that they had logged 36.5 billable hours. What was the amount of gross profit that Fogelin made on the job?
A) $1,494
B) $2,969
C) $925
D) $4,356
Q:
Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800.
In June, Fogelin signed a contract for a Russian ballet performance. They negotiated a price of $6,400 for their services. When the job was complete, Fogelin's records showed that they had logged 36.5 billable hours. What was the actual total cost of the job for Fogelin?
A) $5,475
B) $2,044
C) $3,431
D) $4,906
Q:
Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800.
In June, Fogelin signed a contract for a Russian ballet performance. They estimated it would require 34 hours of specialist time. What is the total cost estimate for this contract?
A) $1,904
B) $5,100
C) $3,196
D) $4,906
Q:
Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800.
What rate would Fogelin use for the cost of its office and administrative staff?
A) $94 per hour
B) $150 per hour
C) $68 per hour
D) $56 per hour
Q:
Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800.
What rate would Fogelin use for the cost of its specialists?
A) $94 per hour
B) $150 per hour
C) $68 per hour
D) $56 per hour
Q:
Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. They have 4 professionals on staff, plus an office with 6 clerical staff. Total compensation, including benefits, for the professional staff runs about $576,000 per year, and they normally have about 8,000 billable hours per year. Professional staff keep detailed time sheets distributed by client number. Office and administrative costs total $754,000 a year.
Bilkins allocates professional time and administrative costs to clients monthly, using allocation rates based on billable hours. During July, Bilkins' professionals spent 36 hours on their client, Soupy Sales. Bilkins adds a 25% markup on their costs to calculate amount billed to the customer. How much gross profit did Bilkins earn from Soupy Sales in July?
A) $1,698.25
B) $648.00
C) $1,870.31
D) $1,496.25
Q:
Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. They have 4 professionals on staff, plus an office with 6 clerical staff. Total compensation, including benefits, for the professional staff runs about $576,000 per year, and they normally have about 8,000 billable hours per year. Professional staff keep detailed time sheets distributed by client number. Office and administrative costs total $754,000 a year.
Bilkins allocates professional time and administrative costs to clients monthly, using allocation rates based on billable hours. During July, Bilkins' professionals spent 36 hours on their client, Soupy Sales. Bilkins adds a 25% markup on their costs to calculate amount billed to the customer. How much did Bilkins bill their customer Soupy Sales for the month of July?
A) $6,633.00
B) $6,833.25
C) $7,481.25
D) $5,985.00
Q:
Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. They have 4 professionals on staff, plus an office with 6 clerical staff. Total compensation, including benefits, for the professional staff runs about $576,000 per year, and they normally have about 8,000 billable hours per year. Professional staff keep detailed time sheets distributed by client number. Office and administrative costs total $754,000 a year.
Bilkins allocates professional time and administrative costs to clients monthly, using allocation rates based on billable hours. During July, Bilkins' professionals spent 36 hours on their client, Soupy Sales. What is the total amount of cost that Bilkins will record for the client for the month?
A) $3,393
B) $2,592
C) $5,040
D) $5,985
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Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. They have 4 professionals on staff, plus an office with 6 clerical staff. Total compensation, including benefits, for the professional staff runs about $576,000 per year, and they normally have about 8,000 billable hours per year. Professional staff keep detailed time sheets distributed by client number. Office and administrative costs total $754,000 a year. What is the cost allocation rate that Bilkins will use for office and administrative costs?
A) $94.25 per hour
B) $36.00 per hour
C) $72.00 per hour
D) $74.13 per hour
Q:
Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. They have 4 professionals on staff, plus an office with 6 clerical staff. Total compensation, including benefits, for the professional staff runs about $576,000 per year, and they normally have about 8,000 billable hours per year. Professional staff keep detailed timesheets distributed by client number. Office and administrative costs total $754,000 a year. What is the cost allocation rate that Bilkins will use for direct laborue004i.e. the cost of the professional staff?
A) $75 per hour
B) $36 per hour
C) $72 per hour
D) $76 per hour
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Abba Accounting expects its accountants to work a total of 24,000 direct labor hours per year. Abba's estimated total indirect costs are $240,000. The direct labor rate is $75 per hour. If Abba does a job requiring 40 hours of direct labor, and bills the client using a standard markup of 40%, what will be the amount that Abba bills the client for?
A) $3,700
B) $4,200
C) $3,400
D) $4,760
Q:
Abba Accounting expects its accountants to work a total of 24,000 direct labor hours per year. Abba's estimated total indirect costs are $240,000. The direct labor rate is $75 per hour. If Abba does a job requiring 40 hours of direct labor, what is the total job cost?
A) $7,000
B) $400
C) $3,400
D) $3,000
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Abba Accounting expects its accountants to work a total of 24,000 direct labor hours per year. Abba's estimated total indirect costs are $240,000. What is the indirect cost allocation rate?
A) $10 per hour
B) $20 per hour
C) $100 per hour
D) $120 per hour
Q:
The engineering firm of Dobbs and Smith uses a job order costing system to accumulate client-related costs. The overhead rate is 60% of direct labor cost. Staff engineer time is charged at a rate of $80 per hour. A recent job for a client involved 30 staff labor hours. How much was the total job cost?
A) $1,600
B) $2,400
C) $3,840
D) $360
Q:
In a service business that uses a job order costing system, the professional staff would normally keep precise records of time spent on each client. It is equally important that the clerical staff and other indirect labor personnel keep similar records of time spent on each client.
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When job order costing is used in a service business, the allocation of direct labor costs is normally based on direct labor hours, and the allocation of indirect costs is normally based on the indirect labor hours.
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In the service industry, the use of job order costing is made much more effective if a company uses computerized time records.
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When job order costing is used in the service industry, the allocation of indirect costs is normally based on direct labor hours.
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Job order costing is used primarily in the manufacturing and industrial sectors, but is not well suited for the service industry.
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Darrius Travel Services provided the following information:
Cost allocation rate for direct labor: $40 per hour
Cost allocation rate for indirect costs: $22 per hour
Darrius is negotiating a job with a new client. The job will require 10 hours of direct labor. If Darrius wishes to make at least 15% gross profit on the deal, they need to receive $713 of revenues.
Q:
Darrius Travel Services provided the following information:
Cost allocation rate for direct labor: $40 per hour
Cost allocation rate for indirect costs: $22 per hour
If Darrius receives $350 for a job requiring 5 hours of direct labor, they will make a profit of $40.
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Darrius Travel Services provided the following information:
Cost allocation rate for direct labor: $40 per hour
Cost allocation rate for indirect costs: $22 per hour
If Darrius receives $700 for a job requiring 12 hours of direct labor, they will make a profit of $44.
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At January 1, 2012, Feldstein Manufacturing Company had a beginning balance in Work in process of $80,000 and a beginning balance in Finished goods of $20,000. During the year, Feldstein incurred
manufacturing costs of $350,000.
During the year, the following transactions occurred:
Job A-12, was completed for a total cost of $120,000, and was sold for $125,000.
Job A-13, was completed for a total cost of $200,000, and was sold for $210,000.
Job A-15, was completed for a total cost $60,000, but was not sold as of year-end.
The Manufacturing overhead account had a preliminary credit balance of $12,000, and was cleared to zero at year-end.
What was the amount of gross profit reported by Feldstein at the end of the year?
A) $2,000
B) $27,000
C) $3,000
D) $15,000
Q:
At January 1, 2012, Feldstein Manufacturing Company had a beginning balance in Work in process of $80,000 and a beginning balance in Finished goods of $20,000. During the year, Feldstein incurred manufacturing costs of $350,000.
During the year, the following transactions occurred:
Job A-12, was completed for a total cost of $120,000, and was sold for $125,000.
Job A-13, was completed for a total cost of $200,000, and was sold for $210,000.
Job A-15, was completed for a total cost $60,000, but was not sold as of year-end.
The Manufacturing overhead account had a preliminary credit balance of $12,000, and was cleared to zero at year-end.
What was the final balance in the Cost of goods sold account?
A) $308,000 debit balance
B) $332,000 debit balance
C) $320,000 debit balance
D) $12,000 credit balance
Q:
At January 1, 2012, Feldstein Manufacturing Company had a beginning balance in Work in process of $80,000 and a beginning balance in Finished goods of $20,000. During the year, Feldstein incurred
manufacturing costs of $350,000.
During the year, the following transactions occurred:
Job A-12, was completed for a total cost of $120,000 and was sold for $125,000.
Job A-13, was completed for a total cost of $200,000 and was sold for $210,000.
Job A-15, was completed for a total cost $60,000, but was not sold as of year-end.
At the end of the year, what was the balance in Finished goods?
A) $60,000 debit balance
B) $40,000 credit balance
C) $80,000 debit balance
D) $30,000 debit balance
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On June 30, Coraline Company finished job number 750, with total job costs of $4,600, and transferred the costs to Finished goods. On July 6, they completed the sale of the goods to a customer for $5,100 cash. In order to record the sale, two entries are necessary, one to record revenue, and one to record cost of goods sold. Which of the following is the correct entry needed to record the cost of goods sold?
A) Debit Finished goods inventory $4,600, credit Cost of goods sold $4,600
B) Debit Cost of goods sold $4,600, credit Work in process inventory $4,600
C) Debit Work in process inventory $4,600, credit Cost of goods sold $4,600
D) Debit Cost of goods sold $4,600, credit Finished goods inventory $4,600
Q:
On June 30, Coraline Company finished job number 750, with total job costs of $4,600, and transferred the costs to Finished goods. On July 6, they completed the sale of the goods to a customer for $5,100 cash. In order to record the sale, two entries are necessary, one to record revenue, and one to record cost of goods sold. Which of the following is the correct entry needed to record the revenues?
A) Debit Finished goods inventory $4,600, credit Sales revenue $4,600
B) Debit cash $5,100, credit Sales revenue $5,100
C) Debit Sales revenue $5,100, credit Cash $5,100
D) Debit Cost of goods sold $4,600, credit Sales revenue $4,600
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At the end of the year, Martin Company has a preliminary credit balance in the Manufacturing overhead account of $95. Which of the following is the year-end adjusting entry needed to clear the balance to zero?
A) Debit Cost of goods sold $95, credit Finished goods inventory $95
B) Debit Manufacturing overhead $95, credit Finished goods inventory $95
C) Debit Manufacturing overhead $95, credit Cost of goods sold $95
D) Debit Cost of goods sold $95, credit Manufacturing overhead $95
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At the end of the year, Deltona Company has a preliminary debit balance in the Manufacturing overhead account of $3,950. Which of the following is the year-end adjusting entry needed to clear the balance to zero?
A) Debit Cost of goods sold $3,950, credit Manufacturing overhead $3,950
B) Debit Manufacturing overhead $3,950, credit Cost of goods sold
C) Debit Work in process $3,950, credit Manufacturing overhead $3,950
D) Debit Gross profit $3,950, credit Cost of goods sold $3,950