ACC320 - PRE-TEST II PART II - SPRING 2012 Name______________________________________________ SHORT ANSWER.

Write the word or phrase that best completes each statement or answers the question. 1) LeBlanc Company has the following balances as of the year ended December 31, 20X5. Direct Materials Inventory WIP Inventory Finished Goods Inventory Factory Department Overhead Cost of Goods Sold Additional information is as follows: Cost of direct materials purchased during 20X5$41,000 Cost of direct materials requisitioned in 20X5 47,000 Cost of goods completed during 20X5 102,000 Factory overhead applied (120% of direct labor)48,000 Required: a. b. c. d. Compute beginning direct materials inventory. Compute beginning WIP inventory. Compute beginning finished goods inventory. Compute actual factory overhead incurred. $15,000 34,500 49,500 4,000 74,500 Dr. Dr. Dr. Dr. Dr.

2) Schulz Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $266,400 and budgeted machine-hours were 18,500. Actual factory overhead was $287,920 and actual machine-hours were 19,050. Before disposition of under/overapplied overhead, the cost of goods sold was $560,000 and ending inventories were as follows: Direct materials WIP Finished goods Total $ 60,000 190,000 250,000 $500,000

Required: a. Determine the budgeted factory overhead rate per machine-hour. b. Compute the over/underapplied overhead. c. Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach. d. Prepare the journal entry to dispose of the variance using the proration approach.

3) Cocoa Pet Corporation manufactures two models of grooming stations, a standard and a deluxe model. The following activity and cost information has been compiled: Product Standard Number of Setups 3 Number of Components 30 Number of Direct Labor Hours 650

Deluxe Overhead costs

7 $20,000

50 $60,000

150

Assume a traditional costing system applies the $80,000 of overhead costs based on direct labor hours. a. What is the total amount of overhead costs assigned to the standard model? b. What is the total amount of overhead costs assigned to the deluxe model? Assume an activity-based costing system is used and that the number of setups and the number of components are identified as the activity-cost drivers for overhead. c. What is the total amount of overhead costs assigned to the standard model? d. What is the total amount of overhead costs assigned to the deluxe model? e. Explain the difference between the costs obtained from the traditional costing system and the ABC system. Which system provides a better estimate of costs? Why?

4) Four Seasons Company makes snow blowers. Materials are added at the beginning of the process and conversion costs are uniformly incurred. At the beginning of September, work in process is 40% complete and at the end of the month it is 60% complete. Other data for the month include: Beginning work-in-process inventory Units started Units placed in finished goods Conversion costs Cost of direct materials Beginning work-in-process costs: Materials Conversion Required: a. Prepare a production cost worksheet with supporting schedules using the weighted-average method of process costing. b. Prepare journal entries to record transferring of materials to processing and from processing to finished goods. 1,600 units 2,000 units 3,200 units $200,000 $260,000 $154,000 $ 82,080

5) Surf Products Company uses an automated process to clean and polish its souvenir items. For March, the company had the following activities: Beginning work in process inventory Units placed in production Units completed Ending work in process inventory 3,000 items, 1/3 complete 12,000 units 9,000 units 6,000 items, 1/2 complete

Cost of beginning work in process Direct material costs, current Conversion costs, current

$2,500 $9,000 $7,700

Direct materials are placed into production at the beginning of the process and conversion costs are incurred evenly throughout the process. Required: Prepare a production cost worksheet using the FIFO method.