Question 1. Craft Manufacturing Company's accounting records reflect the following inventories:
Dec. 31, 2002 Dec. 31, 2001
Raw materials inventory $310,000 $260,000
Work in process inventory 300,000 160,000
Finished goods inventory 190,000 150,000
During 2002, $500,000 of raw materials were purchased, direct labor costs amounted to $600,000, and manufacturing overhead incurred was $480,000.
If Craft Manufacturing Company's cost of goods manufactured for 2002 amounted to $1,390,000, what was cost of goods sold for the year?
Question 2. A process with no beginning work in process, completed and transferred out 15,000 units during a period and had 10,000 units in the ending work in process that were 30% complete. What are the equivalent units of production for the period?
Question 3. A department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of July, there was no beginning work in process; 10,000 units were completed and transferred out; and there were 5,000 units in the ending work in process that were 40% complete. During July, $108,000 of materials costs and $94,500 of conversion costs were charged to the department.
In July, what were the unit production costs for materials and conversion costs?
Question 4. One of Lara Dole Company's activity cost pools is machine setups, with estimated overhead of $300,000. Dole produces flares (400 setups) and health packs (600 setups). How much of the machine setup cost pool should be assigned to flares?
Question 5. Which of the following costs are variable?
Cost 5,000 Units 15,000 Units
1 $100,000 $300,000
2 40,000 240,000
3 90,000 90,000
4 50,000 150,000
Question 6. At the high level of activity in November, 7,000 machine hours were run and power costs were $12,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $6,000. Using the high-low method, what is the estimated fixed cost element of power costs?