Assignment: Caltreck Manufacturing Inc.'s accounting records reflect the following inventories:
Dec. 31, 2005 Dec. 31, 2006
Raw materials inventory $100,000 $ 80,000
Work in process inventory 130,000 145,000
Finished goods inventory 125,000 115,000
During 2006, Caltreck purchased $950,000 of raw materials, incurred direct labor costs of $125,000, and incurred manufacturing overhead totaling $160,000.
Question 1: How much is raw materials transferred to production during 2006 for Caltreck Manufacturing?
a. $1,240,000
b. $970,000
c. $950,000
d. $930,000
Question 2: How much is total manufacturing costs incurred during 2006 for Caltreck?
a. $1,240,000
b. $1,255,000
c. $1,235,000
d. $1,250,000
Question 3: Assume Caltreck Manufacturing's cost of goods manufactured for 2006 amounted to $1,200,000. How much would it report as cost of goods sold for the year?
a. $1,210,000
b. $1,250,000
c. $1,325,000
d. $1,190,000
Question 4: Which one of the following does not appear on the balance sheet of a manufacturing company?
a. Finished goods inventory
b. Raw materials inventory
c. Cost of goods manufactured
d. Work in process inventory
Question 5: Which one of the following represents a period cost?
a. The VP of Sales' salary and benefits
b. Overhead allocated to the manufacturing operations
c. Labor costs associated with quality control
d. Fringe benefits associated with factory workers
Question 6: What is value chain management best defined as?
a. A large chain that keeps the machines from falling on the production floor
b. Management decisions that affect how quickly the production run occurs
c. The incremental value of costs associated with hiring a new production floor leader
d. All activities associated with providing a product or service
Question 7: Costs of good manufactured of SuperK Company are shown below.
SuperK Company
Cost of Goods manufactured
Year Ending December 31, 2006
Beginning work in process: $15,000
Direct materials:
Beginning raw materials $14,000
Raw material purchases 22,000
Total raw materials available for use 36,000
Ending raw materials 5,500
Direct materials used 30,500
Direct Labor 6,000
Total manufacturing overhead 10,500
Ending work in process 18,000
Total manufacturing costs $44,000
How much is the total manufacturing cost?
a. $20,500
b. $23,000
c. $47,000
b. $44,000
Question 8: Which one of the following is an activity not associated with TQM?
a. Tightening the bolts on a chassis so that the frame will not drop out
b. Redesigning the gas tank after fuel efficiency standards are not being met
c. Verifying the 10 check points associated with producing the highest quality loaf of bread
d. Ensuring that the mattress just manufactured meets the standard of comfort of a random factory line worker
Question 9: What is ERP's primary benefit?
a. It can eliminate stand alone systems that do not share information easily for management's use.
b. It allows management to rely on the simplest way to utilize information systems in a manufacturing environment.
c. It permits line workers to perform accounting and marketing tasks.
d. It calculates year end bonuses to a precision not available in traditional information systems management.
Question 10: When property is transferred, the gift tax is based on
a. replacement cost of the transferred property.
b. fair market value on the date of transfer.
c. the transferor's original cost of the transferred property.
d. the transferor's depreciated cost of the transferred property.