The following costing and financial information refers to Global Plastic Inc. for the year of 2010; Sales Revenues 2,105,000 Raw Material Inventory (1 January 2009) 89,000 Raw Material Inventory (31 December 2009) 59,000 Purchases of Raw Material during the year 731,000 Direct Labour Cost 474,000 Selling and Administration Expenses 200,000 Indirect Labour Costs 150,000 Depreciation of Administration building 69,000 Property Tax on Factory 90,000 Depreciation on Factory building 125,000 Income Tax expense 25,000 Indirect Material used 45,000 Depreciation on Factory Equipments 60,000 Insurance on Factory and Equipments 40,000 Utilities for Factory 70,000 Work in Process Inventory (1 January 2009) 0 Work in Process Inventory(31 December 2009) 40,000 Finished Goods Inventory (1 January 2009) 35,000 Finished Goods Inventory (31 December 2009) 40,000 Manufacturing overhead Applied 577,500 21. the Manufacturing overhead cost is Over or under applied by; A. $3,000 under applied. B. $67,500 over applied. C. $2,500 under applied. D. $71,500 under applied. E. None of the Above. 22. the Company PRIME COST is; A. $1,815,000 B. $1,385,000 C. $761,000 D. $1,235,000 E. None of the Above. 23. the Company Conversion Cost is; A. $1,815,000 B. $1,385,000 C. $1,054,000 D. $1,235,000 24. If the Company management policy is to close the over applied or under applied overhead into Cost of Goods sold, which of the following journal entry is correct? A. Dr Manufacturing overhead applied 577,500 Dr Cost of goods sold 3,000 Cr Manufacturing overhead actual 580,000 B. Dr Manufacturing overhead applied 577,500 Dr Cost of goods sold 2,500 Cr Manufacturing overhead actual 580,000 C. Dr Manufacturing overhead Actual 577,500 Dr Cost of goods sold 2,500 Cr Manufacturing overhead actual 580,000 D. None of the Above. 25. What is the Company Net Income for the year 2009? A. $38,500 B. $107,500 C. $$635,00 D. None of the above. 26. What is the Company cost of goods manufactured? A. $1,855,000 B. $1,775,000 C. $1,844,000 D. $1,815,000 E. None of the above. 27. What is the company cost of goods sold? A. $1,775,000 B. $1,810,000 C. $1,772,500 Questions from 28 to 30 are based on the following information: Job G34 was unfinished at the end of the accounting period. The total cost assigned to the job is $48,000 of which $12,000 is direct material. Factory overhead is allocated to goods in process at 125% of direct labour cost. 28. What was the amount of direct labour charged to Job G34? A. $12,000 B. $16,000 C. $36,000 D. Cannot be determined from information given. E. $28,800 29. What was the amount of manufacturing overhead allocated to Job G34? A. $32,000 B. $36,000 C. $19,200 D. None of the above. 30. What was the amount of total cost of goods manufactured for job G34? A. $48,000 B. $64,000 C. Cannot be determined. D. $84,000 31. An equivalent unit of material is equal to: A. The amount of material necessary to complete one unit of production. B. The amount of material necessary to start a unit of production into work in process. C. Half of the material necessary to complete one unit of finished goods. D. An equivalent unit of conversion cost. E. None of the above is correct. 32. Beginning work in process was 1,200 units, 2,800 additional units were put into production, and ending work in process was 500 units. How many units were completed? A. 500 units B. 3,000 units C. 3,300 units D. 3,500 units 33. The appropriate journal entry to transfer the cost of completed units from the Work in Process account would involve a credit to Work in Process and a debit to which of the following accounts? A. Income Summary B. Raw Materials Inventory C. Finished Goods D. Manufacturing Summary 34. Which of the following comments regarding activity based costing is not a correct observation? A. The per unit cost of an end product under ABC will necessarily be less than the per unit cost under traditional costing methods. B. ABC may produce results that are not suitable for external reporting under GAAP. C. Activities are said to be resource drivers because they consume resources necessary for the activities to happen. D. Batch level activities produce costs that may not be in proportion to the number of units produced. 35. Product under costing occurs when the product: A. consumes a high level of resources, but reports a low cost per unit B. consumes a high level of resources, and reports a high cost per unit C. consumes a low level of resources, and reports a low cost per unit D. consumes a low level of resources, but reports a high cost per unit 36. One of the best tools for refining a costing system (allocate cost more objectively) is: A. activity based costing B. job order costing C. process costing D. FIFO costing E. None of the above 37. All of the following are part of the activity based cost system hierarchy except for: A. Manufacturing overhead unit cost. B. direct unit costs C. batch level costs D. product sustaining costs E. facility sustaining costs 38. ABC company has determined that the shipment setup costs should be accounted for at the batch level of activities. ABC believes that the costs assigned to the shipment setup for the current period will be $440,000. ABC is estimating that there will be 400 shipments totalling 8,000 units during the current period. How much cost should be allocated to an order of 70 units that requires three shipments to deliver? A. $165 B. $1,100 C. $3,200 D. $3,850 E. None of the above. 39. Next Generation Information Systems, Inc. pays salaries to a number of computer scientists to design and develop computer operating systems. Into which component of the value chain would this cost be most accurate classified? A. Manufacturing over head. B. Research and development and design. C. Suppliers and production. D. Distribution and marketing. E. Customer service. 40. Big University recently implemented a telephone course registration system. The system eliminated the need for numerous meetings between students and university staff, resulting in an eventual reduction in total administrative costs. This action by Big University illustrates: A. Activity based management. B. Activity based costing. C. Target costing. D. Quality costing.
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