Unit 6 Chapter 9 Self Quiz (ACCT211H)

School: Post University - Course: ACCT 211H - Subject: Accounting

Unit 6 Chapter 9 Self Quiz(ACCT211H) 1.Decena Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. Information concerning the direct labor standards for the company's only product is as follows: Inputs Standard QuantityStandard Price or RateStandard Cost Hours Direct labor0.90hours$18.00 per hour16.20 During the year, the company assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 15,830 hours at an average cost of $18.50 per hour. The company calculated the following direct labor variances for the year: Labor rate variance$ 7,915U Labor efficiency variance$ 1,800F Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. CashRaw MaterialsWork in ProcessFinished GoodsPP&E (net)=Materials Price VarianceMaterials Quantity Variance LaborRate VarianceLabor Efficiency VarianceFOH Budget VarianceFOH Volume VarianceRetained Earnings 1/1$ 1,070,000$ 54,910$ 0$ 84,945$ 425,600=$ 0 $ 0$ 0$ 0$ 0$ 0$ 1,635,455 When the direct labor cost is recorded, which of the following entries will be made? $1,800 in the Labor Efficiency Variance column

2.Lakatos Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product contains the following information concerning direct materials: Inputs Standard Quantity or HoursStandard Price or RateStandard Cost Direct materials3.7kilos$ 9.00 per kilo$ 33.30 During the year, the company completed the following transactions concerning direct materials: a. Purchased 151,800 kilos of raw material at a price of $9.70 per kilo. b. Used 140,870 kilos of the raw material to produce 38,100 units of work in process. The company calculated the following direct materials variances for the year: Materials price variance$ 106,260U Materials quantity variance$ 900 F Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. CashRaw MaterialsWork in ProcessFinished GoodsPP&E (net)=Materials Price VarianceMaterials Quantity Variance LaborRate VarianceLabor Efficiency VarianceFOH Budget VarianceFOH Volume VarianceRetained Earnings 1/1$ 1,130,000$ 59,940$ 0$ 81,510$ 432,900=$ 0 $ 0$ 0$ 0$ 0$ 0$ 1,704,350 a.= b.= When recording the raw materials used in production in transaction (b) above, the Work in Process inventory account will increase (decrease) by: $1,268,730

3.Arena Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: Inputs Standard Quantity or HoursStandard Price or RateStandard Cost Direct materials1.2pounds$ 5.50 per pound$ 6.60 Direct labor0.90hours $ 21.00per hour18.90 Fixed manufacturing overhead0.90hours $ 4.50 per hour4.05 Total standard cost per unit$ 29.55 The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $81,000 and budgeted activity of 18,000 hours. During the year, the company completed the following transactions: Purchased 35,400 pounds of raw material at a price of $4.60 per pound. Used 32,180 pounds of the raw material to produce 26,900 units of work in process. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 23,810 hours at an average cost of $20.60 per hour. Applied fixed overhead to the 26,900 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $67,800. Of this total, $3,800 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $64,000 related to depreciation of manufacturing equipment. Completed and transferred 26,900 units from work in process to finished goods. Sold (for cash) 27,100 units to customers at a price of $36.60 per unit. Transferred the standard cost associated with the 27,100 units sold from finished goods to cost of goods sold. Paid $149,000 of selling and administrative expenses. Closed all standard cost variances to cost of goods sold. The company calculated the following variances for the year: Materials price variance$ 31,860F Materials quantity variance$ 550 F Labor rate variance$ 9,524F Labor efficiency variance$ 8,400F Fixed manufacturing overhead budget variance$ 13,200F Fixed manufacturing overhead volume variance$ 27,945F To answer the following questions, you will need to record transactions a through i in the worksheet below. This worksheet is similar to the worksheets in your text except that it has been split into two parts to fit on the page. PP&E (net) stands for Property, Plant, and Equipment net of depreciation.

CashRaw MaterialsWork in ProcessFinished GoodsPP&E (net)=Materials Price VarianceMaterials Quantity Variance LaborRate VarianceLabor Efficiency VarianceFOH Budget VarianceFOH Volume VarianceRetained Earnings 1/1$ 1,200,000$ 29,700$ 0$ 70,920 $ 505,400 =$ 0 $0 $0$0 a. -$1,628,40$1,947,00$31,86018,06,020 b.-$1,76,990$1,77,540= $550 c.-$4,90,486$5,08,410= $9,524 $8,400 d.-$3,800$1,08,945-$64,000=$13,200 $27,945 e.-$7,948,95 -$1,769,90-$4,904,86 -$3,800 Sub Total: $5,428,74 $47,410 $0 $8,65,815 $4,41,400 = $31,860 $550 $9,524 $8,400 $13,200 $27,945 $18,06,020 Total$18,97,499=$18,97,499 Total:$18,974,99 The ending balance in the Work in Process account will be closest to: 0

4.Alvino Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: Inputs Standard Quantity or HoursStandard Price or RateStandard Cost Direct materials1.1kilos$ 8.50per kilo $ 9.35 Direct labor0.70hours$ 20.00 per hour14.00 Fixed manufacturing overhead 0.70hours$ 5.00 per hour3.50 Total standard cost per unit$ 26.85 The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $70,000 and budgeted activity of 14,000 hours. During the year, the company completed the following transactions: Purchased 32,200 kilos of raw material at a price of $7.80 per kilo. The materials price variance was $22,540 F. Used 30,480 kilos of the raw material to produce 27,800 units of work in process. The materials quantity variance was $850 F. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 18,260 hours at an average cost of $20.50 per hour. The direct labor rate variance was $9,130 U. The labor efficiency variance was $24,000 F. Applied fixed overhead to the 27,800 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $59,500. Of this total, $22,500 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $82,000 related to depreciation of manufacturing equipment. The fixed manufacturing overhead budget variance was $10,500 F. The fixed manufacturing overhead volume variance was $27,300 F. Completed and transferred 27,800 units from work in process to finished goods. Sold (for cash) 29,000 units to customers at a price of $31.90 per unit. Transferred the standard cost associated with the 29,000 units sold from finished goods to cost of goods sold. Paid $101,000 of selling and administrative expenses. Closed all standard cost variances to cost of goods sold.