Cost Measurement Paper 1

1

The following information was taken from Kay Company’s accounting records for the year ended December 31, 2012:
Increase in raw materials inventory $15,000
Decrease in finished goods inventory 35,000
Raw materials purchased 430,000
Direct manufacturing labor payroll 200,000
Factory overhead 300,000
Freight-out 45,000
There was no work in process inventory at the beginning or end of the year. Kay’s 2012 cost of goods sold is






2

Arp Co.manufacturing operations:
Inventories 3/1/12 3/31/12
Direct materials $36,000 $30,000
Work in process 18,000 12,000
Finished goods 54,000 72,000
Additional information for the month of March 2012:
Direct materials purchased $84,000
Direct manufacturing labor payroll 60,000
Direct manufacturing labor rate per hour 7.50
Factory overhead rate per direct labor hour 10.00
For the month of March 2012, conversion cost was






3

Arp Co.manufacturing operations:
Inventories 3/1/12 3/31/12
Direct materials $36,000 $30,000
Work in process 18,000 12,000
Finished goods 54,000 72,000
Additional information for the month of March 2012:
Direct materials purchased $84,000
Direct manufacturing labor payroll 60,000
Direct manufacturing labor rate per hour 7.50
Factory overhead rate per direct labor hour 10.00
For the month of March 2012, cost of goods manufactured was






4

Fab Co. manufactures textiles. Among Fab’s 2012 manufacturing costs were the following salaries and wages:
Loom operators $120,000
Loom operators $120,000
Machine mechanics 30,000
What was the amount of Fab’s 2012 direct manufacturing labor?






5

The fixed portion of the semi variable cost of electricity for a manufacturing plant is a
Period cost . . . Product cost






6

Gram Co. develops computer programs to meet customers’ special requirements. How should Gram categorize payments to employees who develop these programs?
Direct costs . . . Value-added costs






7

In a job-costing system, issuing indirect materials to production increases which account?






8

Costs are accumulated by responsibility center for control purposes when using
Job order costing . . . . Process costing






9

Costs are accumulated by responsibility center for control purposes when using
Job order costing . . . . Process costing






10

In a job cost system, manufacturing overhead is
An indirect cost of jobs . . A necessary element in production






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