Questions -
Q1. During its first year of operations, Silver Company paid $15,085 for direct materials and $10,200 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,200 while general, selling, and administrative expenses totaled $4,700. The company produced 6,050 units and sold 3,700 units at a price of $8.20 a unit.
What is the amount of finished goods inventory on the balance sheet at year-end?
$2,350
$9,250
$13,395
$6,698
Q2. Abby believes her company's overhead costs are driven (affected) by the number of machine hours because the production process is heavily automated. During the period, the company produced 4,400 units of Product A requiring a total of 480 machine hours and 3,400 units of Product B requiring a total of 120 machine hours. What allocation rate should be used if the company incurs overhead costs of $21,600?
$2.77 per machine hour
$36 per machine hour
$36 per unit
$2.77 per unit
Q3. Production in 2012 for California Manufacturing, a producer of high security bank vaults, was at its highest point in the month of June when 47 units were produced at a total cost of $550,000. The lowest point in production was in January when only 22 units were produced at a cost of $347,000. The company is preparing a budget for 2012 and needs to project expected fixed cost for the budget year. Using the high/low method, the projected amount of fixed cost per month is
$158,360
$168,360
$183,000
$203,000