Question 1: Waco's Widgets plans to sell 22,000 widgets during May, 19,000 units in June, and 20,000 during July. Waco keeps 10% of the next month's sales as ending inventory. How many units should Waco produce during June?
A. 19,000
B. 21,000
C. 19,100
D. 18,900
Question 2: Looker Hats is planning to sell 600 felt hats, and 700 will be produced during June. Each hat requires a half yard of felt and a quarter hour of direct labor. Felt costs $3.00 per yard and employees of the company are paid $20 per hour. How much is the total amount of budgeted direct labor for June?
A. $2,400
B. $48,000
C. $3,500
D. $3,000
Question 3: At January 1, 2004, Barry, Inc. has beginning inventory of 4,000 widgets. Barry estimates it will sell 35,000 units during the first quarter of 2004 with a 10% increase in sales each quarter. Barry's policy is to maintain an ending inventory equal to 25% of the next quarter's sales. Each widget costs $1 and is sold for $1.50. How much is budgeted sales revenue for the third quarter of 2004?
A. $42,350
B. $63,000
C. $63,525
D. $57,525
Question 4: A company must price its product to cover its costs and earn a reasonable profit in
A. the short run
B. its early years
C. the long run
D. all cases
Question 5: In most cases, prices are set by the
A. selling company
B. competitive market
C. largest competitor
D. customers
Question 6: In cost-plus pricing, the markup percentage is computed by dividing the desired ROI per unit by the
A. variable cost per unit
B. fixed cost per unit
C. total cost per unit
D. total manufacturing cost per unit
Question 7: Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Information on the two products is:
Mini A Maxi B
Direct labor hours 15,000 25,000
Machine setups 600 400
Machine hours 24,000 26,000
Inspections 800 700
Overhead applied to Maxi B using activity-based costing is
A. $2,000,000
B. $1,280,000
C. $1,664,000
D. $1,536,000
Question 8: Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Information on the two products is:
Mini A Maxi B
Direct labor hours 15,000 25,000
Machine setups 600 400
Machine hours 24,000 26,000
Inspections 800 700
Overhead applied to Maxi B using traditional costing using direct labor hours is
A. $2,000,000
B. $1,670,000
C. $1,536,000
D. $1,280,000
Question 9: When a job is completed, what happens to the cost of the job?
A. It is removed from work in process and included in cost of goods sold.
B. It is removed from materials inventory and included in work in process.
C. It is removed from work in process and included in finished goods.
D. It is removed from finished goods and included in cost of goods sold.