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MT 1 Practice Questions

MT 1 Practice Questions
Course

Introductory Management Accounting (BUSI 294)

26 Documents
Students shared 26 documents in this course
Academic year: 2023/2024
Listed booksIntroduction to Managerial AccountingManagerial Accounting
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Kwantlen Polytechnic University

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BUSI 294

Midterm Review Questions

Question 1 (Suggested Time: 24 minutes)

Eschliman Manufacturing Company had the following account balances for the quarter ending September 30, unless otherwise noted:

Depreciation of manufacturing equipment $88, Depreciation of office equipment 41, Direct manufacturing labour 160, Direct materials used 126, Finished goods inventory (July 1) 180, Finished goods inventory (September 30) 170, General office expenses 101, Indirect manufacturing labour 62, Indirect materials used 28, Marketing distribution costs 10, Miscellaneous plant overhead 45, Plant utilities 30, Property taxes on plant building 9, Property taxes on salespersons' company vehicles 4, Work-in-process inventory (July 1) 46, Work-in-process inventory (September 30) 57,

Required:

  1. Prepare a cost of goods manufactured schedule for the quarter, in good form.
  2. Prepare a cost of goods sold schedule for the quarter, in good form.

The following information is taken from the records of Britton Company for March: Purchases: Direct materials $9,000, Indirect materials 200, Office supplies 420, Sales 36,000, Salaries and Benefits: Selling and administrative 4,000, Direct manufacturing labour 6,000, Rent* 4,000, Utilities* 1,200, Advertising 700,

Inventories: March 1 March 31 Direct materials $4,400,000 $1,600, Indirect materials 500,000 600, Office supplies 150,000 180, Finished goods 24,000,000 16,000,

  • Of these costs, 60 percent are assigned to manufacturing and 40 percent to selling and administration.

Required:

  1. Prepare a schedule of cost of goods manufactured.
  2. Prepare an income statement for the month.

Newfoundland Industries Inc. had the following account balances at the end of the current year:

Direct materials: Beginning inventory $13, Purchases 122, Ending inventory? Direct manufacturing labour 67, Manufacturing overhead 28, Cost of goods manufactured 210, Beginning work-in-process inventory? Ending finished goods inventory? Beginning finished goods inventory 22, Ending work-in-process inventory 14, Manufacturing costs incurred? Cost of goods sold 215, Total manufacturing costs to account for 224, Direct materials used 118,

Required:

Determine the amounts for direct material ending inventory, manufacturing costs incurred, ending work-in-process inventory, and ending finished goods inventory.

Indell Corporation uses a job costing system. Record the following transactions in Indell Corporation's general journal for the current month:

a. Purchased raw materials on account, $36,000. b. Requisitioned $36,900 of direct materials and $7,200 of indirect materials for use in production. c. Manufacturing payroll incurred, $68,000; 70% direct labour, 30% indirect labour. d. Recorded depreciation expense factory equipment $11,500, and other manufacturing overhead of $31,570. e. The opening and closing balances in the inventory accounts for the month were as follows:

Opening Balance Closing Balance Raw materials $14,000? Work-in-process $18,000 $24, Finished goods $15,000 $8,

f. The company applied overhead to work-in-process on the basis of Direct labour cost. The company estimated overhead for the year would be $600,000 and estimated direct labour costs would total $500,000. g. Sales revenue for the month was $200,000.

Required: 1. Determine the pre-determined overhead rate for the year. 2. Determine the cost of goods manufactured for the month 3. Determine the adjusted cost of goods sold for the month. 4. Prepare the income statement to the gross margin line for the month.

Tessmer Manufacturing Company produces inventory in a highly automated assembly plant in Windsor, Ontario. The automated system is in its first year of operation and management is still unsure of the best way to estimate the overhead costs of operations for budgetary purposes. For the first six months of operations, the following data were collected:

Machine-hours Kilowatt-hours Total Overhead Costs January 3,800 4,520,000 $138, February 3,650 4,340,000 136, March 3,900 4,500,000 139, April 3,300 4,290,000 136, May 3,250 4,200,000 126, June 3,100 4,120,000 120,

Required:

  1. Use the high-low method to determine the estimating cost function with machine-hours as the cost driver.
  2. Use the high-low method to determine the estimating cost function with kilowatt-hours as the cost driver.
  3. For July, the company ran the machines for 3,150 hours and used 4,180,000 kilowatt-hours of power. The overhead costs totaled $114,000. Which cost driver was the best predictor for July?

Wall-E Company has provided the following information for the factory overhead cost pool:

Units of Output 120,000 units 220,000 units Indirect materials $2,400,000 4,400, Indirect labour 1,440,000 2,640, Supervisor salaries 550,000 550, Equipment depreciation 250,000 250, Maintenance 875,000 1,507, Utilities 684,000 990, Total $6,199,000 $10,337,

Required:

  1. Using the high-low method and the information provided above, Identify the linear cost function equation for all mixed costs and for total overhead
  2. The company is currently budgeting overhead costs for next year. It expects indirect material costs will increase by 3%, indirect labour and supervisor salaries will be 4% higher and the variable portion of maintenance costs will increase by 2% and the fixed portion of utilities will increase by 5%. All other costs will remain at this year’s level. What is the expected cost function for next year if the company expects to produce 180,000 units?
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MT 1 Practice Questions

Course: Introductory Management Accounting (BUSI 294)

26 Documents
Students shared 26 documents in this course

University: The University of British Columbia

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BUSI 294
Midterm Review Questions
Question 1 (Suggested Time: 24 minutes)
Eschliman Manufacturing Company had the following account balances for the quarter ending
September 30, unless otherwise noted:
Depreciation of manufacturing equipment $88,000
Depreciation of office equipment 41,200
Direct manufacturing labour 160,000
Direct materials used 126,000
Finished goods inventory (July 1) 180,000
Finished goods inventory (September 30) 170,000
General office expenses 101,800
Indirect manufacturing labour 62,000
Indirect materials used 28,000
Marketing distribution costs 10,000
Miscellaneous plant overhead 45,000
Plant utilities 30,800
Property taxes on plant building 9,600
Property taxes on salespersons' company vehicles 4,000
Work-in-process inventory (July 1) 46,800
Work-in-process inventory (September 30) 57,000
Required:
1. Prepare a cost of goods manufactured schedule for the quarter, in good form.
2. Prepare a cost of goods sold schedule for the quarter, in good form.

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