1. Yummy Tummy Desserts has 3,000 quarts of ice cream in WIP Inventory, with all
ID: 2413092 • Letter: 1
Question
1. Yummy Tummy Desserts has 3,000 quarts of ice cream in WIP Inventory, with all materials already added. What are equivalent units in ending WIP Inventory for materials if the ice cream is 67% through the process?
2. How do fixed costs react in total and on a per unit basis?
Fixed costs increase in total and on a per-unit basis.
3. Sykes Company has sales revenue of $585,700. Cost of goods sold before adjustment is $335,900. The company's actual manufacturing overhead is $91,900 while allocated manufacturing overhead is $105,300. What is the actual gross profit?
$236,400
4. Baxter Company produces Frisbees using a three-step sequential process that includes molding, coloring, and finishing. At what stage would the sets be allocated Manufacturing Overhead?
All of the above
5. Which method are managers using when they use their judgment to classify costs as variable, fixed, or mixed?
High-low method
6. Which of the following is not a way in which management can use job cost information?
Using the cost information in determining the bid price for custom orders
7. Which of the following is not a way in which management can use job cost information?
Using the cost information in determining the bid price for custom orders
8. Tall Timbers reports the following data for its first year of operation:
Work in process inventory, beginning
$ 0
Work in process inventory, ending
$50,200
Manufacturing overhead
$25,400
Direct materials used
$7,700
Direct Labor
$60,000
Finished goods inventory, beginning
$ 0
Finished goods inventory, ending
$20,000
Cost of goods manufactured
$42,900
What is the cost of goods sold?
$42,900
9.
A deodorant manufacturer offers the following information:
0 units
33,600 units
11,200 units
22,400 units
$276,480
$585,000
$328,920
The units in ending WIP Inventory were 60% complete for materials and 40% complete for conversion costs.
On December 31, what are the total equivalent units for direct materials?
24,640
10. How is the cost of indirect materials used in the factory recorded?
Credit to Work-in-Process Inventory account
11. XYZ uses job costing. Actual manufacturing overhead for the period is $20,300 while allocated manufacturing overhead is $18,200. What entry will close the manufacturing overhead balance?
990 3,000 0 2,010Explanation / Answer
Since, multiple questions have been posted, I have answered the first three.
____
Question 1:
3,000. (which is Option B)
_____
Explanation:
For materials, the equivalent units in ending WIP Inventory for materials would be taken at 100%. Therefore, the number of equivalents units will be calculated as follows:
Equivalent Units in Ending WIP Inventory for Materials = 3,000*100% = 3,000 units
_____
Question 2:
Fixed costs remain constant in total and decrease per unit as production increases. (which is Option C)
_____
Explanation:
Total fixed costs remain constant irrespective of the level of production. Therefore, as production increases, the per unit fixed cost decreases. This is demonstrated with the use of following example:
Let us assume that at a production level of 10,000 units, the total fixed cost is $120,000. At this level, the fixed cost per unit is $12 (120,000/10,000). If the production increases to 12,000 units, the total fixed cost will continue to be $120,000. However, fixed cost per unit will decrease to $10 per unit (120,000/12,000) indicating a decline of $2 per unit ($12-$10) with an increase in production level.
_____
Question 3:
The value of actual gross profit is calculated as follows:
Actual Gross Profit = (Sales - Cost of Goods Sold) + (Overhead Allocated - Actual Manufacturing Overhead)
Using the information provided in the question in the above formula, we get,
Actual Gross Profit = (585,700 - 335,900) + (105,300 - 91,900) = $263,200. (which is Option A)
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